Saturday, August 25, 2012

The New (Retail) Frontier

So - you think the economy has tanked?  Well, retail sales may not be great in the US, but take a look in the emerging countries of the world.  Wow - have the tables turned!  The appetite for American luxury goods has gone beyond autos and iphones.

Ralph Lauren - Cheng Du Store
 Luxury stores and labels such as Polo Ralph Lauren, Coach, and Tiffany & Co. are building hundreds of stores in China, Asia, India and Russia.  Compare their new middle class to ours.  Here our largest city is New York with just over eight million people.  China has ten cities, each with over ten million people and India has a middle class that's larger than the entire population of the US.  That's a lot of jeans, perfume and jewelry!

DLF Promendade, India

In the case of home furnishings,
we are looking forward to selling a lot of .... well you get the picture!  Right now, Lampworks is producing hundreds of lampshades for store fixtures for these companies and they are being shipped to Shanghai, Macau, Abu Dubai, Moscow, Kazakhstan and well, all those other places, some of which, not too long ago, were considered very remote. Now they are becoming another 57th Street.

The kicker to all this is that so much of the merchandise is actually made in China and Asia - but it is the label that is desirable.  There is a difference, however.  Companies have to rethink how they merchandise their wares as other cultures have different buying habits. They may read from top to bottom and open their wallets based upon how goods The Indian culture is more Westernized, however, the government has been slow to lower import taxes and duty so that more luxury goods can be offered in their stores.