With many Australian consumers continuing to moderate their discretionary spending due to the ongoing cost-of-living crisis, overseas markets could offer a lifeline to struggling local retailers.
Consumer spending in Asia is surging, driven by an expanding middle class, and one expert is urging Australian retailers to tap into this potential revenue stream.
“With the right insights and strategies, Australian businesses can make informed decisions and capitalise on these opportunities by tapping into our region’s dynamic economic future,” Leigh Howard, CEO of Asialink Business, told Inside Retail.
McKinsey & Company’s latest ConsumerWise Survey suggests a growing number of consumers are trading down to save money and selectively splurging on discretionary purchases.
The data suggests that high consumer confidence in China is likely from a growing number of consumers ascending to the middle and upper classes.
With a population of over 4.5 billion people, Asia presents an enormous opportunity for Australian brands to expand.
Australian natural cleaning and body care brand Bondi Wash recently collaborated with Shanghai-based luxury concept store Beast on a home care collection that is tailored to the local market with a new signature scent.
The collection retails at Beast’s locations across China and online through its e-commerce site.
Creative director Amber Shang founded Beast as a flower shop in 2011 before expanding the mission of the business to bring international brands across home decoration, fragrance, fashion accessories, cosmetics, tableware and delicatessen to modern Chinese consumers.
Catering to upper and middle-class Chinese consumers, Beast has amassed millions of followers online and opened 24 brick-and-mortar stores in addition to several e-commerce sites.
The Beast collaboration and its presence on Tmall have helped Bondi Wash grow its omnichannel offering in China.
Bondi Wash has local e-commerce sites in Japan, Scandinavia, Switzerland and Europe, but gaining market share in China is a more intricate process, and it has established a retail partnership with 10/10 Hope in Hong Kong and Taiwan to navigate this.
According to Howard, here are the top five most important factors for Australian businesses to succeed in Asia.
Gaining cultural intelligence is key to effective communication and building trust when doing business overseas.
While virtual modes of engagement are on the rise, core cultural values remain an important factor in international business, and “not understanding this can lead to missed opportunities, delays and lost engagements,” Howard said.
Bondi Wash founder Belinda Everingham met Shang whilst visiting her team in Shanghai. Everingham had long admired Shang’s stores and connected with her over a shared love of botanicals and fragrances, which led to the collaboration.
Strong relationships with suppliers, distributors, clients, and other stakeholders are fundamental.
“The strength of business relationships can determine the ability to gain credit, procurement, and contracting,” Howard said.
As Asian markets mature, consumer preferences are becoming increasingly distinct, and Howard believes it is crucial to understand the unique business culture and landscape within each market to optimise success.
Bondi Wash’s curation of a new fragrance in collaboration with Beast is a prime example of how Australian brands must localise their product offering to meet international consumers’ preferences.
Everingham and Shang developed the fragrance, Osmanthus Eucalyptus, collaboratively as part of the Scent 17 collection of premium home care products – leveraging Everingham’s product expertise and Shang’s knowledge of the local customer.
Bondi Wash’s collaboration with Beast – a respected and niche local retailer – further emphasises how positioning a brand in a new market matters.
Doing business overseas involves a range of risks from economic, political and regulatory, but also the opportunity for lucrative returns.
While bricks-and-mortar retail is a key factor in Bondi Wash’s success locally in Australia, omnichannel retail partnerships are a more viable business opportunity for the brand in China.
“Do your homework to maximise outcomes,” Howard finished.
The post Bondi Wash demonstrates how Australian retailers can tap into the Asian market appeared first on Inside Retail Australia.
