SYDNEY, A Surprisingly Sophisticated Market

The view of the Sydney Opera House from the Park Hyatt Harbourbar

According to Melinda O’Rourke, founder & director of Sydney-based luxury consultancy and recruitment specialist MO Luxury.…

I write this from Sydney where much excitement is afoot with the imminent opening of a brand spanking new Burberry flagship store, the biggest in the country to-date at 800sqm and one to rival many in the Asia Pacific region. To follow later in the year the always pioneering Louis Vuitton is scheduled to open an enormous and unique multi level retail store next to the iconic Apple store.

This is not to mention the recent opening of a Christian Louboutin store, a new Ferragamo store, a pending opening of the first Bottega Veneta, a multi-story Miu Miu store and so on the list goes… Nor do I need to mention the opening in November 2009 of a luxury precinct in a mall, really a first in this country, at such magnitude with well over 20 luxury and premium brands opening in this space. You get the picture.

The luxury market in Australia has been full steam ahead in recent years with growth due to new market entrants and existing luxury brands adding to their distribution network in either new cities (Brisbane and Perth) or adding new stores within existing cities. The number of brands and the number of distribution points has grown beyond threefold in the past 20 years. The strongest growth has been in the past five years by far. Why I hear you ask, with a population nigh on 22 million and spread over thousands of miles? Well, to put paid to what is ‘now’ a myth (of course it wouldn’t have been 50 years ago) that often circulates international luxury headquarters in the northern hemisphere… “Australia is a surprisingly sophisticated market..”.

These are certainly not my words, yet words of several international luxury brand senior executives over the past 15 years when I have had the good fortune to greet, introduce and work with them on the Australian market. Their expectations are low and generalised and stem from hearsay and perhaps from viewing some slightly offbeat Australian movie. As their tour around the country progresses the bigger picture of the opportunities in this country start to emerge. Did I say there were poker faces amongst them, not at all! What was great to see was the shift in interest.

Iceberg’s Dining Room, overlooking Bondi Beach

The market has grown due to an evolving education process and the mere fact we now see what is happening in the world all the time and yes, we want some of ‘that’ in our isolated island state. Whilst consumers still enjoy the opportunity to purchase abroad, the relationships developed locally over time have instilled a strong sense of loyalty to buy here. In addition, Australia is an attractive tourist destination (well most of the time except with the high AUD over the past 8 months) so coupled with the international tourist market and their appetite for luxury, brands decided it was time to be present here.

Australian luxury consumers are ostensibly in the new money camp; even if it is what we call ‘old money’ here it really is new money everywhere else. Australians generally do not have a strong social orientation towards the luxury concept; as a cultural group we are not naturally inclined (due to limited wealth history in this market) to the luxury concept (which can also often relate to formality, again not aligned generally with Australian culture), however Australians have become increasingly sophisticated with their tastes and their disposable income. Whilst there is always going to be a fight for luxury dollars competing across home ownership, cars and toys such as boats, planes, holiday homes etc there is a definite increase in the desire for luxury goods and services. The luxury Tarte Tartin has definitely grown.