Luxasia banks on rise of affordable luxury in Asia

MANILA, Philippines - It’s an exciting period for the beauty industry. Entering the market are a bevy of luxury names in fragrances, cosmetics and skincare that allow both prestige shoppers and consumers on a budget to indulge in premium stock without breaking the bank. Take, for example, the rise of brands like Philosophy, Benefit or Make Up For Ever, whose items are priced in the region of P500 to P3,000. The catchphrase is “affordable luxury” — products that merge both high-end and value for money.

It’s a trend that more people are buying into. Singapore-based Patrick Chong, CEO of Luxasia, the company that brings the top prestige brands to the Philippines, shares the whys and wherefores of this activity. “I noticed one thing: Filipinas have the propensity to be associated with beauty products. They are very eager to be beautiful, to smell good.”

In fact, for perfumes, the Philippines has been one of the most vibrant markets in the region. Patronizing entry-level luxuries gives today’s Filipina the means to fulfill aspirations of prestige in a way that suits their budget. “People do like to say, ‘I’m using Calvin Klein or Givenchy,’” muses the Singapore-based tycoon.

Another factor that is driving this trend is increased consumer confidence coming from BPOs (Business Process Outsourcing) and OFWs (Overseas Filipino Worker) money. Mutya Laxa-Buensuceso, Luxasia’s Philippine country manager, admits that compared to our Asian neighbors, the Philippines’ socio-economic structure is characterized by a tiny AB market, and a largely mass consumer base. But this has changed in the last decade or so, with more and more consumers strengthening their buying power and choosing to buy better products and more premium brands.

In addition to this, shopping habits have changed. Having done business in the Philippines for the past 25 years, Chong remembers a more clearly fragmented market in the old days. “If you wanted luxury, you went to just one retailer. If you wanted mass (products), you also had limited choices. Over the last five to 10 years, shopping malls have evolved.”

New concepts are coming from developers, with entertainment centers, parks and living spaces built into their malls. “These days people don’t go to a store to buy what they want or need,” Patrick says. “Families do their thing at the shopping center. Then see what they like and buy what they see. So things have changed quite dramatically.”

Chong knows that with the changing retail landscape, one must come up with unique approaches that will win the market over. As a regional market maker, Chong has positioned Luxasia to cater to the demands of the Filipina customer in ways that “merge local nuances with global perspectives.” It’s a whole new ball game and an exciting one where bigger brands will be made more accessible to a greater segment of the market — in a fun way.

Not just content with setting up mono-brand retail shops, Chong is looking at marrying entertainment and retail concepts to revolutionize the shopping experience: themed cafés that allow guests to experiment with fragrances; trendy makeovers in edgy venues; digital applications that reach a wider market through technology; integrated launchings of new products done with smart technology and working with the right people across Asia. And he’s looking forward to having the best Filipino talent join the Luxasia team in piloting these exciting concepts on domestic and regional shores.

Chong shares that these activities are backed up by strong competences that form the backbone of Luxasia. “We can leverage on the market intelligence that we have because we have operated in the oldest market in the last 25 years.” And, thanks to the company’s relationship with the movers and shakers of the industry, Luxasia is able to bring consumers exactly what they want in a tailor-fit approach.

Such thrilling prospects are what Chong and Laxa-Buensuceso are eager to share with the local stakeholders in the Philippines. He says, “Tell me, what business could be better than the beauty business?” Indeed, nothing sounds more exciting.