Understanding Australia's Business and Consumer Environment: A Guide for Successful Business Down Under

Understanding Australia's Business and Consumer Environment

How will Australia's economy, business environment and consumer trends impact the success of your business? This e-book examines the fundamentals businesses must understand to successfully expand or operate in Australia.

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Heralded as the success story among advanced economies for weathering the global economic downturn of 2008-2009, Australia’s high income levels and steady growth offer good opportunities for consumer goods and services in a wide range of sectors.

Key Findings:

• At the height of the global slowdown, advanced economies as a whole contracted by 3.5% - contrasting with Australia’s 1.4% growth.
• Whereas incomes and consumer expenditure have stagnated across many advanced economies, Australia’s per capita disposable income and expenditure have expanded by 9.8% and 3.5% respectively in real terms since 2008.
• In 2012, Australia was ranked 15 out of 183 economies on the World Bank’s Ease of Doing Business Index, meaning it is the fifteenth easiest place in the world to start and operate a local firm.
• Australia has an educated population: 99.9% of adults (those aged 15+) were literate in 2011, but suffers from skills shortages.
• In 2011, the population aged 45-49 in Australia had the highest average gross income: A$77,810 (US$80,259).

Topics include:

• Ease of doing business rating
• Corruption index
• Literacy rate
• Future challenges
• Natural resources
• Media consumption
• Consumer trends
• More

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The Changing Face of Collaborations in the Luxury Goods Industry: Beyond the H&M Collaboration Phenomenon

Analyst Insight by Michael Lieblich, Contributing Analyst, Euromonitor International

Since H&M, the fast fashion retailer, launched its first designer collaboration with Karl Lagerfeld in 2004, followed later by Jimmy Choo (2009) and Versace (2011) to name but a few, the publicity surrounding collaborations in the luxury goods industry has rapidly increased. When Louis Vuitton started an artistic collaboration with graffiti artist Stephen Sprouse in 2001 there was a lot less publicity and media hype than with today’s current collaboration with Yayoi Kusama. But what are the benefits of collaborations between high street brands, luxury brands and the world of art?

Collaborating with Missoni

Most recently, Havaianas, the Brazilian brand famous for its wide range of flip-flops, launched a special footwear range designed in collaboration with Missoni, under the Missoni Loves Havaianas label. The range is available at a large number of Havaianas stockists, along with directly owned Havaianas and Missoni stores. To an extent, this detracts from the luxury element, where limited availability is the key to creating demand and an aura of exclusivity. However, the collaboration still brings a number of benefits for both parties. From Missoni’s perspective, on the one hand this allows customers to buy into its range at a much lower price point, which works in a similar way to H&M’s collaborations with luxury designers. Following the initial “affordable” purchase, consumers are likely to trade up and purchase other Missoni products. On the other hand, the collaboration has furnished Havaianas with a way of drawing in new luxury goods buyers who would not have previously bought into the Havaianas brand, also helping to expand its consumer base.

Hear Euromonitor Speak at TTG Luxury Seminar 2013

Date: 29 April 2013
Location: London, UK
Presentation Time: 10:30 a.m.

Research Analyst Johanna Kolerski-Bezerra will present "The Paradox of Luxury’. She will explore the global luxury goods market and will explain how wealthy tourists from faster growing BRIC markets are boosting luxury goods sales in Western Europe.

2012 saw another positive performance in Western Europe from luxury goods despite persistent economic turbulence and mounting problems in the Eurozone. The presentation will explore the potential for this positive performance to be perpetuated in the short to medium term and discuss the various drivers of growth in the next years.

For more information, please visit TTG Luxury Seminar's event website.

Leading Beauty Trends for 2013

Analyst Insight by Nicole Tyrimou, Analyst - Beauty and Personal Care, Euromonitor

The beauty and personal care market experienced another strong year in 2012, improving upon its 2011 performance despite the deepening of the economic crisis in Europe and a slowdown in China’s economic growth.

As already discussed in our 10 Global Consumer Trends in 2013, there have been changes in what the recessionary consumer views as ‘value’. Consumers are now more willing to pay for convenience, with ‘experience’ also becoming increasingly important in the value equation. Thus, more and more companies are focusing on how consumers experience their brands and services. This new profile can be likened to that of beauty consumers, with the trend having moved into the beauty arena.

The Future Big Spenders in Travel and Tourism

Many factors contribute to shopping habits abroad, but a strong currency certainly helps. Of the top five countries for outgoing expenditure on shopping per departure, only Venezuela saw its currency weaken against the US dollar with a devaluation in 2010. Shopping, though, is the largest expense for Venezuelans abroad since they access dollars at the official exchange rate, which is much cheaper than the black market rate, and goods are cheaper abroad due to high domestic inflation.

Go West Strategy in China Presents Risk and Opportunity for Luxury Goods

Analyst Insight by Rob Walker, Contributing Analyst, Euromonitor International

China’s interior provinces have potential to be a major growth engine for luxury goods, but as brands expand into the second and third tier cities of the West there is a risk too that they will dilute their cachet in the sophisticated first tier cities of the East.

The lure of southwest China

China’s interior provinces account for around two thirds of the population, but only a fifth of economic output. That disparity is narrowing, however. Infrastructure investment, retail modernisation and economic incentives to entice manufacturers are empowering second and third tier cities in the interior and helping push wealth westwards.

Luxury Goods Landscape: China

Benefitting from a fast-growing middle class and a fast-developing distribution network, sales of luxury goods in China have consistently outperformed the global market. Sales of luxury goods in China tripled in value in the 5 years to 2012 and by 2017 the country’s luxury market is set to double in value again. By 2017 it is set to overtake France, the UK, Italy and Japan, making China the second biggest luxury market in the world after the US.

China’s Luxury Gift Culture: Dead or Alive?

Analyst Insight by Rob Walker, Contributing Analyst, Euromonitor International

This time last year, there were more Chinese government officials and company executives sporting Cartier or Rolex timepieces than you could shake a stick at. Today, many of those same luxury timepieces are locked up in drawers at home or are on sale at second-hand stores such as Brand Off in Shanghai. Most government officials wouldn’t be seen dead wearing one.

This reflects a crackdown on shows of wealth in government circles, which has filtered into the business environment too. China’s political leaders have watched nervously as popular discontent in the Middle East and Africa has led to the overthrow of governments. Some view these events as a window into China’s future, and are keen to rein in any visible signs of venality. In a key sign of a tougher and more conservative approach in China, new leader Xi Jinping has made the fight against corruption his number one mission.

Who is Buying Fountain Pens?

With the growth of electronic devices such as computers and smartphones and with the younger generations preferring ball point pens, fountain pens have had to re-define itself as a luxury product endowed with jewels and precious metals, rather than as a utilitarian tool. Luxury brands such as Parker and Montblanc, thus, are successful in persuading appreciators cutting across both developed and emerging markets to fork out a higher sum per unit purchase.

Jewellery in 2013: Interpreting the Latest Financial Results

Analyst Insight by Sulabh Madhwal, Personal Accessories and Eyewear Analyst, Euromonitor International

Jewellery is not only the largest personal accessories category by value sales, but also the fastest growing. As such, events affecting the jewellery competitive landscape attract great attention from accessories manufacturers and retailers. Some financial results documented over January and February 2013 are set to influence the biggest jewellery brands worldwide.

Asia Pacific losing its influence?

On the evidence of several companies’ quarterly results for the period ending December 2012, Asia Pacific did not perform as well as expected. Buoyed by retail expansion and increasing brand recognition, both Richemont (owner of Cartier) and Chow Tai Fook saw their Asia Pacific revenues grow in excess of 40% over the calendar year 2010/2011, a feat which was unlikely to be repeated. One reason for this is simply a return to pragmatic growth rates as the companies in question pursue strategies to expand in second and third-tier cities in key markets such as Japan and China. In the last quarter of the 2012 calendar year, Chow Tai Fook reported regional sales growth of 4%, while Richemont’s revenues increased by 6%.