Consumer & Industry Trends

Consumer Trends

With a higher disposable income to spare these days, most youths are seeking quality over price in their purchase.  Youth in Singapore are often seen wearing the latest trends as they are brand conscious. They have the tendency to be influence by their peers when making purchases.

Magazines catered to the youths are seen promoting latest fashion trends, celebrity news, restaurants that help shape the overall purchase habits.

Singapore is still strongly influence by a westernized culture but in the recent years,  Korean and Japanese fashion are gaining their presence in the country as Korea and Japanese dramas and music are becoming increasingly popular.

For the young adults who have entered the workforce and enjoy a  greater financial freedom , they started to own credit cards and are seen purchasing higher end fashion labels.

There has been an increasing trend in youths purchasing digital gadgets such as MP3 players, phones with data plans for web browsing , as for the teens, such spending have exploded in recent years and is expected to grow rapidly.

Youths are often seems using social media sites and playing online games with the prevalence of computers and internet in households these days. Other activities such as dining in restaurants like Pizza huts, Swensens are common for youths and these companies have since offer students discounts to capture this group of consumers.

Industry Trends for the Denim Industry

1.  Asia Pacific Spending Trends

Total jeans sales in Asia Pacific amounted to US$23 billion in 2010 with men’s jeans taking up 56% of the total market share[1]. In general, Asia Pacific trends in jean are more skewed towards the economy jeans segment, however, with the rising affluence of the middle class, most of them are willing to switch to high end designer labels or mid-priced but well established international brands. Hence, we do see a potential growth in the premium segment in jeans in Asia Pacific as people get more affluent. However, the most important cause for growth of jeans in Asia Pacific is due to westernization of Asian cultures and the growing acceptance of jeans over traditional costumes.

2. Economy Jeans

2/3 of the worlds’ jeans are economy jeans, contributing to 39% of the total market value of jeans[2]. Although the market share for economy jeans has been shrinking due to the switching of consumers to the premium jeans market, the decrease in unit price per jeans has hidden the fact that economy jeans segment is still growing.

Economy jeans are typically the entry point for many companies into emerging economies, with premium jeans more significant in developed countries. Asia Pacific has the largest market for economy jeans with India and China getting more and more receptive to western cultures and abandoning their traditional costumes.

3. Move towards Sustainability

With the emphasis on sustainability and being green by the general consumers, there is a growing concern on not just the environment friendliness of the cotton (organic cotton). Organic cotton is cotton grown without the use of harmful chemicals such as pesticides and fertilisers. However, companies are placing their attention beyond just the use of cotton, but extending the green idea of sustainability across all their operations, including manufacturing techniques, water use, dye impact, soil health, labour issues and fair trade. Across the industry, we see a trend for companies to do the right thing in an economically viable way and to make a difference in the environment.

4. Rising Raw Material Costs

Rising raw material costs is a huge concern for the industry[3]. Unfavourable weather conditions has caused cotton yield to decrease, shrinking supply in the market, driving price increase. As cotton prices continue to increase, it presents a huge squeeze on the margins on the various brands in their bid to keep their prices low to guard against competition. They may have to pass on the increase in prices to the end consumers who will go longer in terms of purchase and thus impacting volume sales.

5.  Move towards Online Shopping

Although internet retailing represents only 4% of the total market, the figure has doubled over 2005 to 2010 and it is likely to continue growing and is unlikely that the trend will change as internet access and download speed continues to grow, especially in the Asia Pacific region[4]. Internet retailing gives one distinctive advantage, and that is to reach remote places where it is hard to set up a store. Cult following on blogshops in Asia, indicating that there is still much growth in this area where large brands and retailers have not tapped into.  Furthermore, brands will be able to use the online retailing presence to enhance their brand value as social network marketing becomes an increasingly more important part of brand image. One flipside for online retail is that consumers in general are still concerned about fit, which may impede sales online. However, online store extends the brand presence across geographical differences, pushing the brands into the comfort of consumers’ home, thereby increasing store traffic when consumers want to try out a particular piece of denim they see online.

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[1] Adapted from Global Denim Trends: Will the growth fade away published by  Passport on August 2011

[2] Adapted from Global Jeans Market Sees Fruit of Economic Recovery but There Are Still Challenges Ahead published by Euromonitor in May 2011

[3] Adapted from Global Jeans Market Sees Fruit of Economic Recovery but There Are Still Challenges Ahead published by Euromonitor in May 2011

[4] Adapted from Global Denim Trends: Will the growth fade away published by  Passport on August 2011