Made-in-Asia luxury sheds fake image

Asian brands are winning clients with products that can rival goods made in Europe

For decades, made-in-Asia luxury has been shorthand for "fake." Now, companies from South Korean bag maker Couronne to Malaysian dressmaker Farah Khan are making a case for homegrown chic.

Couronne, Khan and brands such as Woo, a Shanghai-based producer of silk scarves, are winning clients with products that can rival goods made in Europe. Their growing popularity, amid slowing sales at Louis Vuitton and other European brands, shows how demand is changing in Asia, with consumers favoring fresh designs over ubiquitous logos. The trend may lead to more acquisitions in the region.

"Luxury brands of the 21st century can come out of anywhere," says Uche Okonkwo, executive director of consultancy Luxe Corp. While products such as Apple's iPhone and Toyota Motor 's Prius have boosted Asia's renown for high-quality manufacturing, the region's association with mass production and knockoffs has damaged its luxury credentials. China alone accounts for more than half of international trade in counterfeit goods, the Organization for Economic Cooperation and Development estimates.

Italian and French companies, meanwhile, have helped reinforce the notion that production of luxury apparel and accessories is the preserve of Europe even as they buy materials and make some items abroad. Hermes International, the Paris- based producer of the $7,000 Birkin handbag, hosts product- making demonstrations to highlight its French savoir faire, yet it gets cashmere from Mongolia and weaves it into scarves in Nepal.

The upshot is that while Asians accounted for half of worldwide luxury purchases in 2012, according to consultant Bain & Co., "just a fraction" of last year's $272 billion in sales came from Asian brands, Luxe estimates.

Korea's Couronne is helping change perceptions of made-in- Asia luxury with its colorful, logo-light designs. In 2012, Couronne posted sales of $40 million, about the same as some smaller European luxury brands, such as Italian shoemaker Berluti, owned by LVMH.

Couronne gets as much as half its leather from the Italian and French companies that supply Hermes, Gucci, Prada and Vuitton. This year, it expects revenue to grow 38 per cent as it adds seven outlets to the 54 that sell its wares in Korea, the US, and Italy. Vuitton sales may gain 6 per cent this year, excluding currency swings, HSBC predicts.