Phnom Penh stores five years ago.
But Cambodia's growing middle class has brought with it shoppers more
willing to fork out cash for expensive threads, name-brand clothing
retailers say.
Per-capita gross domestic product in current US dollars increased
about 70 per cent between 2006 and 2011, according to Ministry of
Economy and Finance estimates.
The trend is translating into more shoppers at the increasing number
of name-brand clothing shops on Sihanouk Boulevard, near the capital's
Independence Monument.
"[Cambodians] really have purchasing power now. They come in nice
cars, but you also see people pulling up on motorcycles and shopping
in our stores," said Ly Souden, marketing manager at Sovereign Retail
Group, one of Cambodia's two major name-brand clothing importers and
brand representatives.
Domestically owned Sovereign Retail opened a VNC clothing franchise on
the north side of Sihanouk Boulevard in 2005.
Today, the company owns Paris's Axara and Spain's Mango franchises, as
well as Malaysian brands
On the south side of the boulevard, Ming Wouy Group, also domestically
owned, represents brands such as Polo Club, Pierre Cardin and
Samsonite.
Ming Wouy and Sovereign Retail will expand this year on the positive
economic outlook for the country in 2012.
The government has projected 6.5 per cent year-on-year growth.
Thaipheang Oudam, area sales manager at Ming Wouy's New Collection
sales venue on Sihanouk Boulevard, said sales for name-brand products
were driven by customers who had spent time overseas, but customers
who had never been abroad were also peeking into the stores.
"The middle class is growing. People are going to school, taking care
of their families and spending more money," he said.
Sovereign Retail's sales grew by an annualised 11 per cent in 2011, Ly
Souden said, up from four per cent in 2009 and 2010, but below the
pre-economic crisis growth of 15 per cent.
Ming Wouy's clothing retail saw a similar trend, but Thaipheang Oudam
did not disclose exact growth figures.
Sales were still threatened by the counterfeit products that flooded
Cambodia's markets, the retailers said.
"We have faced that problem. A lot of people were asking why they need
to buy shoes here for $40 when they can get them for half price
somewhere else," Ly Souden said.
"Some people don't trust us. 'Is this the real thing?' they ask."
Five years ago, the concept of a name brand was novel to most
Cambodians, Ly Souden said.
The recent increase in clothing products from Europe has introduced
new quality standards to the Kingdom.
Thaipheang Oudam said counterfeit products had actually helped shape
an appreciation for name brands.
As the Khmer concept of quality evolved, an increasing number of
Cambodians were seeking out authentic counterparts of the fake brands
they had worn for years, he said.
The clothing market was intensely competitive and "chaotic", City Mall
general manager Hung Chuang Ming said this week.
The sheer number of shops marketing clothing – real or fake, on the
street or in a mall – reduced the potential market share any one
retailer could capture, he said.
Clothing isn't the only thing name-brand clothing retailers are trying
to market.
Sovereign Retail and Ming Wouy say they are also trying to sell a
customer-service experience.
Opening the Mango franchise required a level of service training not
available five years ago, Ly Souden said.
Only when staff had met Mango's service requirements, as well as
design standards for the venue, was Sovereign Retail granted the
franchise, he said.
"The key to any luxury brand's success will be how it targets
consumers and the point-of-sales experience when they go into the
stores," Marcus Osborne, CEO of the Malaysia-based brand consultancy
FusionBrand, said.
Developing brand awareness would be an important factor in emerging
markets, Osborne said.
Promotion, presentation and advertising would shape the customer's
experience with the brand, he said, although the process would take
time.
Retailers predict fast growth in the niche market this year.
Japanese shopping-mall developer Aeon will begin building a mall this
year, with completion expected in 2014.
Hiroyuki Okazaki, Aeon's deputy general manager in Cambodia said the
company saw much potential for high-end clothing retail in Phnom Penh.
He declined to mention specific brands but said the mall would have
Western luxury products as well as products from Japan and Korea.
Based on the rate of market growth, Ly Souden said it was impossible
to say what brands Cambodian shoppers would be trying on in the next
few years.
"We can't have these brands here now, but in five years I think we'll
have Louis Vuitton and Gucci," he said.
High-end retailers find new market
Don Weinland
Wednesday, 15 February 2012
http://www.phnompenhpost.com/index.php/2012021554505/Business/high-end-retailers-find-new-market.html
