Western Brands Face Competition From The Upstarts.(The Good Life)

Byline: Sameer Reddy

One hallmark of newfound wealth in the developing world has been the embrace of Western luxury labels. But since the global economy fell apart last fall, the moneyed classes in India, the Middle East, China, Brazil and Russia have cooled their spending on quilted Chanel handbags and Gucci shoes.

That doesn't mean they've given up luxury fashion altogether. They are turning to smaller, local designers who are using the market downturn to incubate homegrown premium brands and compete with Armani and Bottega Veneta by providing high-quality luxury products at a fraction of the price. In India, the crisis has translated into an unexpected opportunity for Manish Arora and Rajesh Pratap Singh, two of the country's most talented designers. Both translate aspects of Indian culture and taste into unique contemporary collections, fusing Indian color sense and embroidery with rigorous Western tailoring. Their pieces have global appeal but also speak specifically to Indian customers. For as little as $350, Indian shoppers can purchase a dress at either designer's flagship store in Mumbai, indulging their inner fashionistas without feeling guilty. "Indian designers have been sensitive to market conditions and have adjusted both their product and prices, allowing customers to have a sense of getting a good bargain even at the top end," says luxury retail consultant Sabina Chopra.

Chinese designers Guo Pei and Wu Yong are also winning new fans at home--despite their high price tags. Their work isn't overtly Chinese; most upscale Chinese consumers are more interested in Western silhouettes. Pei and Yong create melodramatic fantasy gowns, ranging in price from about $4,300 to upwards of $43,000, that incorporate shredded chiffon, ombre-dyed fringe and oversize hoop skirts as well as hints of Eastern influence. Guo Pei CEO Jack Pao Chieh Tsao reports that despite the downturn, the company's revenue grew 25 percent in '08, and he anticipates 20 percent growth this year, thanks exclusively to domestic sales.

In Lebanon, Georges Hobeika's atelier turns out elaborately embroidered gowns with prices that run as low as $15,000 (compared with $200,000 for some French couture gowns). Last year sales grew 20 percent in Lebanon, despite increased production costs and the collapse in oil prices--a major factor in regional wealth.

Brazilian designers like Ronaldo Fraga and Oskar Metsavaht are less interested in classic luxury than in channeling their folk heritage, laidback beach culture and impressive handicraft tradition into a "low to high" look. Metsavaht's ...