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The global fashion business journal

Jun 15, 20244:08pm

Australia: a 17 billion euros fashion market opens up to Europe

The European Union (EU) continues to search for allies globally to promote trade exchanges. This month, Brussels started negotiations with Canberra aiming to ink a free trade agreement with Australia and New Zealand.

Jun 12, 2018 — 10:00am
J.C. / S.R. / L.M.
Australia opens up to Europe with a 17 billion euros fashion market



The European Union (UE), Australia and New Zealand have initiated talks to lay the foundations for a free trade agreement. Brussels has already several bilateral accords with both countries, but the goal now is to deepen the bonds.


European fashion brands have been targeting Oceania in recent years, especially since Australia has one of the highest GDP per capita in the Asia-Pacific region and a young population.


While negotiating the terms of the new agreement, Brussels benefited from the already open policy in foreign trade of the automotive, chemical, machinery and food industries. The agricultural sector will remain outside of the free trade agreement.





Despite the distance between Europe, Australia and New Zealand, commercial exchanges between these territories are fluid. The EU is the third largest trade partner of Australia, with exchanges that reached 47.7 billion euros in 2017, and the second of New Zealand, with a commercial flow of 8,700 million euros.


In the last few decades, Australia has become an advanced market economy, progressively more competitive over the years, largely boosted by the economic reforms adopted in the eighties. The country’s long-term concerns include an aging population and environmental disasters such as floods, droughts and forest fires.


Australia is a young country, with 41.5% of it's 23.2 million inhabitants aged between 24 and 45 years old. In fact, the country’s population has an average age of 38.7 years. Australia’s GDP per capita reached 49,900 dollars per year, according to data released by the World Bank.





New Zealand, on the other hand, has 4.5 million inhabitants, of which almost 40% are between 25 and 54 years old, and the average age is 37.9 years. GDP per capita stands at 38,500 dollars per year.


The country’s economy grew by 3.5% in 2017 and 69.9% of its GDP was generated by the services sector, which employs nearly 74% of the population. On the other hand, 26.2% of GDP is linked to the industry, and 3.9% by agriculture.



Fashion spending

Australians’ spending on clothing reached 17.1 billion euros in 2017, according to a study by EAE Business School elaborated with Euromonitor data. The industry turnover, which grows every year, will reach 18 billion euros in 2020.


In 2016, each Australian household spent 1,915 euros on clothing, a much higher amount than the 1,535 euros that German families invested, although lower than that registered in the United Kingdom and Norway, where family spending reached 2,559 and 2,510 euros, respectively.


European fashion exports to Australia totalled 1.5 billion euros in 2017 and, in 2018, they have followed the same wake, since in the first quarter of the year they reach 376.4 million euros.


Between 2013 and last year, EU fashion exports to Australia increased by 20.5%. At the start of the period, sales stood at 1.1 billion euros, and have been elevating progressively year on year.


With these data, the possibility of gaining market share in both markets is very high, especially in Australia, where fashion sales grew in 2017, although at a lower speed than they did in 2016, according to Euromonitor data.


The sportswear market was the one that evolved the best, thanks to the rising success of women's products, among which are footwear, hosiery and women’s underwear.


Key fashion players in Australia

At present, Cotton On Clothing Pty, Specialty Fashion Group and Premier Investments are some of the key players in the Australian fashion market. The country is in the midst of a competitive environment that has caused the departure not only from foreign operators, but also of the locals.


However, the situation can take a radical turn in the coming years. The latest report from Main Streets Across the World by Cushman&Wakefield, points out that big operators will have the opportunity to gain positions in high street across Australian cities, as several lease contracts emerge on the horizon.


Local fashion distribution companies are also moving towards suburban shopping malls, which has freed up space for international companies such as Zara, H&M, Uniqlo, Pandora and Swarovski.

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