Australian Innovation

Bagging a Foothold in Asia

Founded in 1938, Oroton began life as a fashion fabric company trading with Asia. It diversified into army supplies to help defense efforts in World War II, before producing a powder puff – made in Germany – that would launch the brand’s specialty line of luxury cosmetic products.

The brand became a retail phenomenon across Australia, claiming something of a cult-following for its Paris-inspired purses, clutch bags and brush, comb and mirror sets. By the 1970s, Oroton mesh evening bags were so in-demand that the brand was asked to produce a limited-edition purse especially for the opening of the Sydney Opera House.

By 1987, the Oroton Group was a listed company with an expanded product range selling through 50 stores across Australia and New Zealand. Select items have been sold in Hong Kong and Europe for years.

Asia’s Fashion Capital
Group CEO Sally Macdonald said the wholesale business, which also includes the Polo Ralph Lauren brand, had been “building nicely” overseas. This led to the decision to open Oroton Hong Kong in the ifc mall, Central, last September.

“It has always been our intention to open Oroton boutiques in Asia and, possibly, London and other parts of the world,” she said. Hong Kong, as the fashion capital of Asia, was a “natural step” for this offshore expansion.

“We have a warehouse in Hong Kong, a Hong Kong-based designer who helps with quality control, and Hong Kong is our business hub for some of our hardware and packaging. When we’re travelling to Europe, the United States or South America, or wherever we go, we always go through Hong Kong, so it was a market we are all very familiar with.”

It is also a “natural gateway to China,” where 60 per cent of the brand’s products are made, the rest produced in various countries.

“All of our products come through Hong Kong,” said Ms Macdonald. “At our warehouse in the New Territories, we consolidate stock and wait for the seasons to turn. We find it a convenient hub, at a reasonably low cost. We have a really good, service-oriented partner who runs it, so we’re very happy. We looked at Singapore, Hong Kong and Shanghai, and settled on Hong Kong as the most logical place.”

Early Mover Advantage
As for why now, Ms Macdonald asks: why not now? During the global financial crisis, when others were struggling, Oroton retained its strong financial position. “It made sense for us to look around at a time when others might have been less confident about expanding. “We continue to believe,” Ms Macdonald added. “Our Chinese customer base in Australia continues to grow. We looked at our competitors in the Hong Kong market and, while they are many, we believe our product is beautiful and wonderful value for money as well.”

Availability of prime retail space at the prestigious ifc mall was another plus. “If people don’t know the brand, they need to understand what it is by the company it keeps,” said Ms Macdonald. “Ifc is a very fashionable mall, but also has a good base of office workers, which has traditionally been very much our market – somebody who’s aspirational, who wants to be groomed and polished at work.”

Asian Expansion Plans
Since opening in Hong Kong, Oroton has also opened a boutique in Singapore, with a further three stores planned for Singapore and Kuala Lumpur, and is considering other sites in Southeast and North Asia as well. The brand is “very serious” about its long-term commitment to Hong Kong, an important market in its own right, with many tourists coming from around the world, especially the Chinese mainland. “Hong Kong is an important place to be; it is the place people talk about,” Ms Macdonald said.

The company is currently talking to several landlords about possible sites this year, with potential for nine stores in Hong Kong and Macau. “We’re ready now. It’s more about getting the right rental deals and locations,” she said. “We’re a brand that’s been around for more than 70 years, so we’re not going to try to do it all in five months either; it’s got to be at the right pace.” And the right place.

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