Taiwan Is at a Crossroads. Here's Why Brands Should Care.

'The real value of the Taiwanese fashion market can only be understood when it is not seen through the prism of its giant neighbour.'

1/11/2020 4:01:00 AM

'The real value of the Taiwanese fashion market can only be understood when it is not seen through the prism of its giant neighbour.'

Tensions with Beijing have come into sharp focus ahead of Taiwan’s presidential election which takes place tomorrow. And there is a lot more at stake than first meets the eye.

TAIPEI — The sub-tropical city of Taipei is a relaxed metropolis, dense and highly-developed; a bastion of liberal values in a part of the world occupied by socially conservative neighbours and authoritarian regimes.Its downtown streets are safe and friendly, populated by throngs of young office workers, students and shoppers. Home to an interesting array of retailers, from major chains of malls such as Eslite to cool concept stores that stock niche brands and provide spaces to sip cold-brewed coffee while quietly leafing through the pages of a book, Taipei is an affluent and busy city, but one where people prioritise comfort and quality of life.

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“A lot of people think Taiwanese people don’t have style, but they do care about things looking good,”ElleTaiwan’s Editor-in-Chief, Florence Lu, explains. “But if it’s not comfortable, they won’t consider it.”Some believe that this is simply a legacy of Taiwan’s laid-back island mentality; others say that craving comfort in everything, from eateries to fashion, stems from the territory’s uncomfortable geopolitical position — and the outlier status that accompanies it.

Valuable Market Tangled in GeopoliticsIn this month’s presidential elections, due to be held January 11, the people of Taiwan confront once again the enduring question of whether their future lies with the rising might of Beijing, or on self-reliance with support from sympathetic but increasingly subdued Western powers who fear jeopardising their own relationships with the Chinese government. headtopics.com

Though the boom economic period of the 1980s and ‘90s are a fading memory for Taiwan’s people, the territory has remained particularly resilient in the face of geopolitical and macroeconomic headwinds impacting the region.Incumbent president Tsai Ing-wen will be boosted by this economic buoyancy but there is frustration.

Taiwan recently posted 2.91 percent year-on-year GDP growth in the third quarter of 2019, bucking the sluggish trend of other trade-reliant Asian economies, such as Singapore, South Korea and Hong Kong. Taiwan’s growth in the July to September quarter beat analyst expectations and was higher than the 2.4 percent growth recorded in the second quarter of 2019.

On the eve of elections, incumbent president Tsai Ing-wen is being boosted by this economic buoyancy but there is frustration at slower-than-expected progress in increasing income levels. She has been leading in the polls, with her popularity surging since

violent protests began to roil in neighbouring Hong Kongsix months ago, a situation that has increased Taiwanese focus on the potential for interference from Beijing should they get too close.As a member of the Democratic Progressive Party (DPP), Tsai is thought of as an anti-Beijing candidate and, since taking power in 2016, has not acknowledged the “One China” policy, which holds Taiwan to be part of China. headtopics.com

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“Hong Kong people have showed us that ‘one country, two systems’ is definitely not feasible,” Tsai said in a televised New Year speech, referring to the political arrangement that guaranteed a level of autonomy to the former British colony following its return to China in 1997.

Tsai is up against Han Kuo-yu, who represents the Kuomingtang Party, which ruled Taiwan for decades before Tsai’s DPP party dethroned them to form a majority government for the first time in 2016. Han, the mayor of Kaohsiung, has comparatively conciliatory views toward Beijing.

Han is seen by many as the candidate who would maintain or extend the Economic Cooperation Framework Agreement (ECFA) which reduces tariffs and commercial barriers between Beijing and Taipei.  If Tsai defeats Han, business leaders will be concerned that a continued drift away from mainland China will hinder the ability of Taiwan to grow its industries, including fashion.

“Fashion has no boundaries; fashion is a global thing but I think it’s a challenge for the government because these days the Taiwan government doesn't like this area or that area and are putting a restriction on themselves. I think they need to overcome that way of thinking,” said Sophie Jiang, the Taiwanese owner of E&A Communications, a luxury PR firm with offices in Taipei, Shanghai, Beijing and Hong Kong. headtopics.com

It is into this environment that Taiwan’s Ministry of Culture has more assertively stepped in to promote domestic creative industries, including fashion. In October, the ministry, in conjunction with other government bodies, publisher Hearst Taiwan and powerful industry body, the Taiwan Textile Federation, held the second edition of Taipei Fashion Week.

The event is designed as a platform to promote local talent, with names that are already very familiar to the local (and to some extent, the international) market such as Shiatzy Chen, Douchanglee and Jamei Chen rubbing shoulders with up-and-comers Just in XX, UUIN and Fu Yue.

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The real value of the Taiwanese fashion market can only be understood when it is not seen through the prism of its giant neighbour.“Taiwan’s textile industry is performing very well and is renowned around the world, a lot of international brands, [including] Adidas and Lululemon, are manufacturing here. This part [of the industry] is totally at an international level, but on the other hand, for independent design brands from Taiwan, it’s very difficult,” Lu says.

Understated Rich AsiansThe Taiwanese market is minuscule compared to that of mainland China. According to 2019 figures released by market research provider Euromonitor International, the retail value of the apparel sector in Taiwan was $8.37 billion while mainland China reached a staggering $334.15 billion. And that chasm is set to widen even further as the apparel sector’s year-on-year growth rate in the mainland is more than double that of Taiwan.

However, the real value of the Taiwanese fashion market can only be understood when it isnotseen through the prism of its giant neighbour. The value of fashion products sold in Taiwan is more than four times higher than that in some wealthy Arab Gulf States such as Qatar — even though the latter gets a lot more attention from the global fashion industry.

It has been the stability of Taiwan’s fashion market that has made it attractive enough for luxury brands to keep investing, particularly as Hong Kong’s reputation as a hub for luxury shopping hastaken a hit as a result of its continuing political unrest

.The island’s uber-wealthy consumers – discreet and under-the-radar though they may be – make Taiwan an important staging post for international luxury brands.It may not have the Crazy Rich Asians reputation of Singapore, Hong Kong or Shanghai, but according to the 2019 Knight Frank Wealth Report, Taipei is actually ranked ninth in world cities for the highest number of ultra-high-net-worth individuals. And the ranks of the ultra-wealthy in Taipei have swollen 17 percent over the past five years, according to the report.

It has been the stability of Taiwan’s fashion market that has made it attractive enough for luxury brands to keep investing. Read more: The Business of Fashion »

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