APAC stands for almost 37% of the global personal luxury market -- larger than both US (24%) and European market (28%). Major Asian fashion markets include China, Japan, Korea, Taiwan, and Hong Kong. While China leading market in term of size, it might not be the easiest and suitable entry point for all brands. Surrounding markets and e-commerce may act as a first step.

Trending segments are casualwear, athleisure, and influencer-driven brands

Casualization and growth of athleisure

Wearing casual but stylish outfits for nearly every occasion become common, and this trend is expected to keep growing. Casual and trendy street fashion and athleisure outfits, like sneakers, yoga pants and T-shirt are popular among APAC consumers. One big winner is Lululemon with +24% yoy sales growth mostly from Asian markets. The company’s survey reveals that four in five APAC consumers wants to ditch work suits for casual clothing. Swedish athleisure brands should differentiate and stand out – be creative in building community, fanbase and engage with local customers.

Influencers set fashion trends and raising KOL brands

Fashion brands localize via collaboration with influencer (KOLs). Asian consumers are more willing than western counterparts to follow their favorite with purchase. More KOLs are leveraging their attention and affinity from followers to launch own brands, e.g., Grace Chow from China, Irene Kim from Korea, Kerina Hsueh from Taiwan, Yivy Yusof from Malaysia. Swedish brands can consider collaborations with local KOLs, e.g., cross-over collection and marketing as one step to raise local awareness.

Sustainable fashion – Good to have even though not a must

With increasing awareness of environmental issues, people are more aware of fashion sustainability. Fashion business in Asia is stepping forward in green campaigns and business with increasing consumers engagement, e.g., H&M Clothes Recycling and clothes rental. There is a slight rise in second-hand stores. As the overall awareness in the aspect is behind Sweden, sustainability is a plus in a brand/business but not a must in consumers’ purchase decision.

The emergence of affordable luxury and Scandi-trend is continuing  

Growing Affordable Luxury and Premium Brands

The fashion market was segmented into top international luxury and fast fashion with key players such as, Zara, Mango, Forever 21 in Asia. However, the demand for affordable luxury emerges in recent years as young generation and growing middle class have an appetite for brands that balance between price, design, and quality.

Emergence of Local Brands and cross-over collaborations

The national pride is propelling consumers, especially Gen Z, to support domestics brands. More local brands arise with deeper understanding of local consumers behaviors and preferences e.g., Li-Ning from China, Uniqlo and Urban Research from Japan, Gentle Monster and Andar from Korea, Love Bonito from Singapore. International brands entered collaboration with local brands to cater for consumer nostalgia. Examples are H&M x TOGA, Marimekko x Uniqlo, Puma x Randomevent.

Increased presence of Scandinavian brands

A number of Scandinavian fashion brands successfully built their recognition across APAC. With H&M being the leader in fast fashion, other notable Scandinavian brands include Acne Studios, Ganni, J.Lindeberg, COS, Daniel Wellington, Fjällräven, and Happy Socks. More Scandinavian niche brands are seen in concept shops and local e-com channels. Tmall reported a triple sales increase on niche Scandinavian brands during 2021. These brands are priced as premium brands by consumers in the region with higher expectations on quality and value.

There are optional distribution channels

Asia retail market is very dynamic. While e-commerce offers convenience and rises, tradition retail is still common as physical stores act as hubs of discovery and experience. Going forward in Asia, a hybrid concept is a recommended business model capture traffic from offline to online, vice versa.

Offline Fashion Retail

Traditional shopping destinations e.g., departments stores, multi-brand & concept stores, and brand stores are dominant distribution channels for fashion.

  • Department stores are popular and convenient shopping destinations with their large selection of brands for middle to high-income class from top luxury to middle fashion.
  • Multi-brand fashion stores are retailers that offer a variety of fashion brands. Among them, there are some concept stores/selection shops sell well-curated products matching store’s special theme to appeal to specific target audience.
  • While opening brand stores might be questioned in Europe, this is not the case in Asia. Brand stores are regarded as a credible channel in consumers’ eyes and build trust. Not only does the store serve as sales channels, but it also delivers the brand image and brand concept.

Raise of Online Shopping

According to Forrester, online retail sales in APAC is estimated by $2.5 trillion USD in 2023 where fashion is the largest category.

Asian consumers are mobile centric, especially the Gen Z. Consumers in Hong Kong and Taiwan are accustomed to overseas shopping sites e.g., Farfetch, Net-a-porter or brands official websites, while consumers in China, Korea and Japan use own local marketplaces, such as Tmall, JD.com, SGG, Coupang and ZoZoTown. Swedish brands wishing to enter fashion e-commerce should pay attention to the customers behaviors and may work with local and mobile friendly platforms.

Looking beyond

Capturing the huge potential in the Asian market is not easy. Brands should take a stepwise approach and build an APAC regional strategy. Consider these key recommendations prior entering the market:

  • Carefully select a market as a starting point: While China leads in terms of market size and volume, brands should not underestimate the surrounding markets which are interconnected and influence each other on trends. Brands should plan an entry market as a testing ground according to their resources and capacity.
  • Build and communicate a strong and unique brand identity: Consumers are looking for uniqueness which sets a brand apart from others. Connecting with consumers emotionally with a well-structured narrative and strong visual elements has become ever more important. Brands are recommended to put effort in building and communicating its style.
  • Adapt hybrid retail concept: While a lot of brands are fading in their offline business, the landscape is different in Asia where a majority of brand engagement and transaction occurs offline. Online presence serves as a place for discovery and comparison. Therefore, a hybrid model is strongly recommended. Offline presence may be in shop-in-shops or pop-ups for smaller brands.
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Mainly Applicable to major markets i.e. China, Hong Kong, Taiwan, Japan, Korea, Singapore