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(Last updated: 19 Jul 2007)
Trends and opportunities
The market
The textile retail trade is changing rapidly and radically. The pressure for change is enormous and this is made even more acute by the ever-decreasing business cycle for consumer goods. Consumers are no longer willing and able to spend big money on textiles. Lifestyle and theme concepts have burst the limits of the conventional range on offer, and mix apparel with shoes, cosmetics, jewellery and the like. Mono-brand stores are increasingly replacing multibrand stores.
Verticalisation is changing the pattern of cooperation with industry. Major retailers increasingly influence production. Manufacturers open up their own shops or establish all manner of partnership-models from franchising to concessions. Vertical chains are replacing independent small enterprises and competition continues to come from foreign retailers. An increasing volume of textiles is being sold by discounters, drugstores, supermarkets and retail chains such as Tchibo (which were traditionally coffee-shops but are now offering a wide range of other items for sale, including clothing and apparel).
Classical distinctions between industry and trade are no longer as clear-cut as they previously were. Factory outlet centres aand shop-in-shop systems are becoming increasingly powerful and undermining the traditional role of specialised retail traders.
Retail chains replaced family-owned specialised shops. Every fourth Euro spent on textiles in Germany goes to four leading companies - KarstadtQuelle, Otto, C&A and Metro.
The German market for apparel has been decreasing steadily for the past few years. The demand is saturated and the market is dominated by low-cost imports. Imports of 'traditional' Australian products such as knitted goods of wool and cotton have decreased considerably.
Opportunities
While there is still interest in Australian clothing, all major Australian brands such as Akubra, RM Williams, and Driza-Bone are established in the market and prospects for additional manufacturers are therefore smaller.
Being a sports nation, Australia's competitive edge could be in sportswear. However, this is a question of building a brand name - the market is dominated by labels that have become household icons through the investment in huge advertising campaigns. At the outset only a price advantage can help a manufacturer to compete and only persistence will help build an image.
According to German importers of Australian clothing, Australia can be competitive with products that are outstanding and different in design, ie. products that are new and completely different from what is already available.
Competitive environment
Australia's main competitors are low labour-cost countries in Central, Eastern and Southern Europe, as well as Asia. Most clothing in Germany is sourced from Asia, Eastern Europe, Greece, Turkey, Portugal, Northern Africa and the CIS States where production costs per minute are only 25 per cent of German costs. |