Interview: Bernie H Liu

What is the attractiveness of the ASEAN bloc as a market, and which drivers will support its growth in the short to long term?

BERNIE H LIU: A population of 600m and a combined economy of roughly $2.5trn highlight the attractiveness of ASEAN as a broader market, especially when compared to the opportunities found within the Philippine market, with a population of more than 100m and a GDP of $250bn. However, the process of tapping into the 10-country bloc is a difficult endeavour given that ASEAN countries are not homogeneous, but consist of diverse cultures and people. This translates into different sizes, colour tastes, style preferences and lifestyle trends within their respective fashion industries. To meet the challenge of meaningfully participating in the ASEAN market, several steps need to be taken.

First, one must look at a country’s existing laws, restrictions and operating systems prior to entering the territory, as this will define the way one decides to participate. An effective way to gain access to an ASEAN market is through franchising, best done in partnership with a local player, ideally someone well entrenched and familiar with local laws.

Finding the right partner is a critical component of entering a market and the partner’s commitment to one’s brand is integral to ensuring success. In many cases, a partner’s advantages lie in their large retail presence in the country; however, due to their size, there may be less exclusivity or emphasis on the brand. Smaller partners may be less well connected, but more involved in the brand’s development. Second, a retailer must find ways to effectively deliver goods to these ASEAN countries. Before even ensuring that the products, services and brands are relevant to the local market, one must build the infrastructure and delivery platforms needed to successfully operate in the country. This means to invest in people on the ground to spot the right locations, build a logistics network and develop an ICT backbone to facilitate operations.

How can smaller fashion retailers or entrepreneurs effectively scale up to tap into business opportunities internationally?

LIU: A number of small retailers and entrepreneurs enter the fashion business after being enticed by the apparent glamour of the industry – the endorsers, the fashion shows, the parties, the visuals. As result, many often neglect the back end of the business.

While they may deploy and try to capitalise on web presence and social media platforms for marketing visibility, they usually overlook the back-end infrastructure: supply chain, data storage and analytics, controls, and governance. For fashion retailers, the ability to translate a design idea into a product is crucial, as is working with vendors who are proficient with the use of different kinds of technology and tools. To ensure the success of the business model, retailers need to align their application of technology to operational priorities that guarantee a product is front and centre and that it is competitively priced and available. People must continue to enhance these efficiencies and not get distracted by the glamour side of the business.

Entrepreneurs with international ambitions must understand that to do well abroad, they must first do well at home. While opening a store may be easy, it is extremely difficult to keep it open and expand one’s presence. In the Philippines, for example, brands based in Manila wishing to expand to the Visayas or Mindanao regions must not be complacent about their preparedness; they must continuously innovate and adjust to the different consumer trends. They can also consider looking for suitable partners to fuel expansion.

Beyond the product, a business must be customer-centric for it to survive in today’s retail market, especially as supply has overtaken demand. Retailers need to narrow down their focus and listen to their market through social media monitoring, having faceto-face interviews, observing consumer behaviour and actively talking to merchandisers and customers.