Over the years I have been tracking luxury brands in Asia. Singapore and Hong Kong labeled “tigers” have been the hub of Southeast Asia’s luxury goods sector. Now new markets are emerging called “Asian tiger cubs.”
Overall, according to a report released in late October by Bain & Company, Southeast Asia has experienced 11 percent growth in the personal luxury goods market compared to 6 percent globally in the 2012-2013 time periods. Singapore remains the regional leader due to tourists/visitors from mainline China and Indonesia who also flock to the new luxury casinos. HSBC released a report that now indicates that the same Chinese travelers are frequenting Malaysia, Thailand, Vietnam and Indonesia. The estimated growth in these markets are now projected at 40 to 60 percent given their small base, hence the label “Asian tiger cubs.”
Unfortunately there are issues associated with the rampant luxury goods sector like high store rental and labor costs, local investment laws requiring foreign brands like Cartier, Gucci, Fendi, Channel, etc. to have a local business partner. In addition, the World Bank recently projected that growth in these Southeast Asian countries will begin to slow down. Regardless of what all the analysts are preaching, the “Asian tiger cubs” remain a popular tourist destination and the high-end brands continue to report double digit growth.
Will the “Asian tiger cubs” continue to grow up in Southeast Asia?