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3 April, 2006 Thailand Fashion Market: Receptiveness of Hong Kong Brands |
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EXECUTIVE SUMMARY
Thailand Fashion Market
Thai Consumer Characteristics
- Shopping is an important weekend activity
- Fashion details are essential
- Fast Fashion
- Young consumers
- Celebrity influence
Thailand Fashion Market Segments
| Exclusive | e.g. International brands like Burberry, Chanel |
| High-end | e.g. Suit: US$350-400 |
| Higher-middle-end | e.g. Suit: US$200-250 |
| Middle-end | e.g. Blouse: US$25-50 |
| Low-end | e.g. T-shirt: US$5-10 |
Hong Kong Fashion Brands Well Received
Quite a number of Hong Kong fashion brands are well received by Thai consumers, although Thai consumers may not be aware that these brands are from Hong Kong, for example:
- Baleno (Baleno, Samuel & Kevin)
- Bossini
- Crocodile
- ESPRIT (edc, ESPRIT, Red Earth (cosmetics))
- G2000 (U2, G2000)
- Giordano
- Toppy (Episode, Jessica, Colour Eighteen)
Market Positioning: Similar to Italian brand Benetton, which targets a much higher-end market segment in Asia than at home, Hong Kong brands target market segments that are higher in Thailand than in Hong Kong.
Target Consumers: Given the price, target consumers of Hong Kong's fashion brands are highly concentrated in Bangkok.
Successful Business Models: Hong Kong brands team up with local partners. For instance, ESPRIT works with Minor Group (a major Thai importer), while G2000 and Bossini work with Central Department Store.
Promising Future
Retailers and importers in Thailand see growing consumer spending on clothing products, especially with more promising business prospects for foreign ready-to-wear fashions.
Lower import tariffs brought by free trade agreement (FTA): For instance, under the China-ASEAN FTA, the tariff rates for imported clothing have fallen sharply from 30-37% to 20% since July 2005 and will be tariff free by 2010.
The increasingly affluent middle class look to "branded" fashion products for identity and better lifestyle. It is estimated that currently around 3% of the Thai population (about 2 million) are "upper middle class" earning 20,000-30,000 baht (about US$500-750) per month.
Major retailers' new strategy: To stay competitive, retailers in Thailand have to compete with differentiated products and services. For instance, Tesco-Lotus is repositioning its clothing sections from "basic" to "more fashion details".
Fashion is priority sector. Thailand aims to build Bangkok into a "tropical fashion hub" as the country has no winter and to help Thai designers and companies boost their fashion and clothing exports.
Hong Kong designers are highly regarded in Thailand. Many Thai designers are interested in working with Hong Kong designers and Hong Kong companies to sell to the Chinese mainland and the international market.
Major Challenges
Keen competition from foreign brands: Hong Kong brands have to compete with a large number of ready-to-wear fashion brands from the US and Europe.
Grey market issue: Hong Kong fashions are faced with more severe grey market problems relative to other foreign brands in Thailand. As Hong Kong is geographically close to Thailand, "smuggled" Hong Kong fashions (without paying the high import tariffs) are more easily found in the Thai market.
This new report is available at TDC's Retail Outlets. It can also be purchased through the TDC Bookshop section in the TDC's trade portal: info.hktdc.com.
For the Press Release, please go to TDC News & Speeches.
