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.
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.
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.
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.
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.
