THE AUSTRALIAN wool industry needs to target two key growth areas – the affluent ageing population and the booming mothers and babies market, according to AWI’s group manager of market intelligence and reporting Paul Swan.
Speaking at the WoolPoll meeting in Orroroo, South Australia, last week, Dr Swan said key market drivers and changing economic conditions meant Australian Wool Innovation had revised its marketing tact.
“One of the big challenges for us is we have to move away from just relying on our traditional markets, particularly in the big cities for formal woven clothing.
“We have to develop new markets,” he said.
One opportunity was the market for over 50-year-olds which would dominate by 2016, especially in the United Kingdom, France, Germany, Italy and Japan, where that age group will comprise more than 50 per cent of disposable income. In Japan, the over-50s will make up half of the country’s population.
For Australia, this meant there would be fewer suit wearers in traditional markets. One possible option was developing ‘below-the-waist’ casual wear containing wool, which was under investigation.
Dr Swan said these changes meant new products that targeted new markets were critical.
With 27 million babies born in 2010 in the 10 major wool markets, Dr Swan said one avenue for huge growth was the babywear market.
With declining birth rates, Dr Swan said families were spending more on their children. In most cases, the spend on babywear per child rivalled what adults would spend on themselves.
But Australian wool currently had no share of this market – a fact which AWI was out to change.
To counter this, Dr Swan said a new pink Woolmark brand would be launched in 2013, underpinned by a skin comfort assessment using the new Wool ComfortMeter developed by the Sheep CRC and its partners.
He said one of the major barriers to getting wool into babywear was the perception it was an allergen and that four in 10 Western consumers nominated prickle and itch as a barrier to buying wool.
Dr Swan said on the whole, Australia’s traditional markets were changing.
“In the next 10 years, you will see very clearly the emergence of the BRIC nations (Brazil, Russia, India and China) and our traditional markets focus on luxury, that’s where the growth will come from,” he said.
This was evidenced in economic growth figures. The Asia/Pacific region and China were tipped to increase their share of GDP growth, while the EU, Japan and US were all set to decline.
Japan had been Australia’s second largest suiting market but China overtook Japan in 2009 in the size of economy. By 2017, China will be bigger than all the countries of the Eurozone. By 2025, it will be bigger than the US.
“We are experiencing this fundamental transition which is the emergence of affluent Asia,” Dr Swan said.
“China is driving luxury market growth. In 2004, consumer spending growth was 7pc. In 2011, it was 9pc and from 2012-17 it is supposed to be 8-10pc every year.”
Dr Swan believed the wealthy – defined as those who spend more than $US900 a year on clothing – would get wealthier, further driving growth in luxury wool purchases.
Chinese consumer attitudes to the positive attributes of wool were also growing. A survey in 2007 of Chinese consumers found their perceptions were that wool is expensive, worth paying extra for, natural, classic fibre and symbol of status. In 2011, the perception of wool had only increased in these areas.
This story Administrator ready to work first appeared on Nanjing Night Net.