Apart from the likes of Asian-American fashion darlings such as Alexander Wang and Phillip Lim, few Asian fashion houses have made it to the big league around the globe. But a recent slew of online retail startups are zoning in on Asian designers to attract the niche customer. With Europe and the US still in economic recovery, it’s little wonder that such online entreprenuers are attempting to lure Asian consumers with Asian products.
‘In the past five years, the standard of Asian-designed and Asian-produced fashion has grown exponentially and a lot of these brands can hold their own against their Western counterparts,’ says Corinne Ng, founder of www.shopthemag.com, who claims that her website was the first to offer Asian-produced fashion when it launched in 2011.
‘People in Asia are recognising this and are beginning to consume these brands, so demand is coming from the domestic market and neighbouring markets,’ she notes. ‘In short, Asia is supporting Asian fashion.’
‘Asians have a strong identity when it comes to fashion,’ says Kate Tan, founder of www.eriin.com. ‘Japan matured a lot faster than the rest, and now it’s time for the others to grow, especially China. In Beijing and Shanghai alone, there is now an exponential increase of small boutiques stocking local Chinese designers. We definitely wouldn’t call this a passing trend – more of a growing community that will gain traction in the years to come.’
Today, other sites such as Asia Fashion Inc, Gnossem.com and Le Shop des Créateurs are also jumping on the Asian fashion bandwagon, leaving the high-end, international designer labels to bigger players like www.net-a-porter.com. And their strategy appears to be sound, as consumers across different segments in the region seem to be embracing the online shopping mania.
‘Asians have become increasingly affluent and the increased usage of the internet has led to an increase in online shopping,’ says Eugene Ho, regional leader in consumer business at Deloitte Southeast Asia. ‘Consumers are more open in seeking new and trendy designs from markets like Japan, Korea and Taiwan and online shopping provides them with access to the latest fashionwear which may not be available in retail outlets.’
According to Ho, the barrier of entry to setting up an online shop is substantially lower than with a ‘bricks-and-mortar’ retail outlet. In fact, it provides a lower-risk option to test new products and markets. And as Asian brands are usually less recognised by an international audience, the online platform allows these labels to reach out to a regional – if not global – customer base. Asia Fashion Inc, for example, incorporated a magazine and blog into its site, while www.shopthemag.com profiles fashion industry insiders in the region through its BAD (Backing Asian Designers) campaign.
However, Timothy Chen, founder of Asia Fashion Inc, is not relying solely on an internet presence to reach out to customers. The company also creates pop-up store events to allow shoppers to touch and try on their products.
‘We try to do a pop-up event every two months to create awareness, and these stores are highly effective in terms of sales, as they allow our fan base to actually see our entire selection in the flesh,’ says Chen, who admits that he would love to one day establish a traditional retail store.
‘Pop-up events allow us to receive feedback, which is essential as we really listen to what shoppers want to see, rather than impose certain styles and trends onto the customer. If they want to see more flats, for example, we will source for more flats.’
While there may appear to be lower barriers to entry when it comes to setting up an online business, there are nevertheless a multitude of challenges unique to the retail platform.
As Ho explains, one of the key challenges for new e-commerce sites in Asia is to build sufficient credibility so that consumers have confidence in the quality of the product and, most importantly, assurance that their personal data and payment information is kept secure. Some sites will obtain independent accreditation – for example, TrustSg in Singapore – to alleviate consumers’ concerns.
In addition to setting up technology infrastructure, establishing an e-commerce business requires new processes. In traditional retail, there was no such thing as an ‘order’; the customer picked up the product and went to the checkout. In contrast, online stores may have to manage a complex supply-chain process from order capturing to fulfilment. This can get more complicated if an order is returned.
The problems escalate for businesses that do not operate on consignment terms – whether because they stock more established brands that insist retailers buy their products outright or because the margins from consignment agreements are slimmer.
‘Some brands require you to pay for 100% of the buy before delivery,’ says Ng. ‘When the delivery reaches you and there are issues with quality and we wish to return or exchange certain stocks, the accounting procedures are very tedious and often drawn out.’
Managing an international clientele also leads to other problems for businesses that operate out of a single country. ‘They say the internet has no boundaries, but localisation is very important in terms of the selection of merchandise to suit a particular market, or consumer culture,’ says Chen, who plans to set up regional outposts. ‘In Indonesia, for example, shoppers prefer to pay cash on delivery rather than by credit card when they place their orders online.’
And then there is the issue of sourcing designers from around the region. For Chen, this means travelling constantly and having to adapt to the mindset of different business and communication styles. Operations are also an issue for the owners of www.eriin.com.
‘Firstly, keeping track of inventory is a tedious process, especially with shipments coming in from around Asia Pacific,’ explains Tan. ‘Having to follow up with a range of shipping companies, as well as implement an efficient schedule with our designers, seems like a daunting task during our peak periods.’
For another online retailer and fashion industry player, focusing on Asian designers for an Asian shopper is simply an unrealistic business model.
‘While I am passionate about supporting Asian designers, I believe we still have a way to go towards having our own Alexander Wangs and Jason Wus,’ says Tjin Lee, founder of www.curatededitions.com and www.futurefashionnow.com, as well as director of Singapore’s annual fashion week, Audi Fashion Festival.
‘There is a ceiling to what mass Asian consumers might be willing to pay at this time for regional designers, with the perception that things made in Asia should cost less. However, given the smaller production volumes of budding Asian designers, this isn’t usually the case. Asian fashion consumers are also largely brand-obsessed, and while there is a cult of consumers looking for unique finds, this group could still be fairly niche.’
However, Ho still sees potential in the near future for Asian online shoppers, especially with mature markets that have long adopted a mobile commerce (m-commerce) culture.
‘In Japan, we foresee continued advancements in m-commerce as accessing content on the go is now a basic requirement, with a focus on marketing fashion brand information on mobiles,’ he says. ‘In China and Indonesia, the growth of the middle class and young population will fuel the demand for online fashion retail.’
Besides, according to a PayPal Online and Mobile Shopping Insights study conducted by Nielsen in 2011, the size of the Singapore online shopping market reached S$1.1bn in 2010 and is forecast to reach S$4.4bn in 2015.
‘I don’t see why there should be huge competition among local online retailers of fashion as the market is big enough to support all of us,’ says Chen. ‘We should share tips and work together to promote the talents of our region.’
May Yip is a freelance fashion writer based in Singapore. She is editorial consultant at Catalog Magazine and was previously editor at Style magazine