After a year of global hardship perpetuated by the spread of the coronavirus, Australia’s economy—and its fashion sector—appear to be on the road to recovery.
The Australian government’s response to the Covid crisis, both from a public health and economic standpoint, has been robust. The country of 25.3 million has implemented a $2.4 billion health package to fund efforts to contain the virus’ spread, according to the Department of Health. The government is also in the midst of rolling out an unprecedented economic support package worth $17.6 billion, designed to “encourage investment and keep people in jobs.”
Coupled with the Covid containment measures and a new, aggressive program for disseminating vaccines, the government-funded relief has helped bolster businesses and pull industry back from the brink.
This week, two the of the country’s most prominent financial institutions—Westpac Banking Corp. and National Australia Bank Ltd. (NAB)—announced significant pickups in quarterly profits for the first time in months, Reuters reported. NAB, Australia’s No. 2 lender, rolled back bad loan provision charges prompted by the pandemic, much to the relief of those banked with the organization, pointing to encouraging economic trends as the impetus. The bank touted a 47 percent improvement in its average quarterly results from the last half-year in its earnings update Tuesday, with reported cash earnings of $1.28 billion for the three months ending on Dec. 31.
Meanwhile, Westpac, the No. 3 bank in the country, saw shares shoot up by 6 percent, the highest rate in a year, Reuters reported. The October through December quarter saw the bank’s profit reach $1.53 billion—a 16 percent increase from a year prior. According to Reuters, Westpac also experienced a rebound amid a reversal of bad debt charges and massive levels of fiscal support from the government.
Government gains for Australian Fashion Week
Banks aren’t the only ones getting bailed out, though. IMG, the firm originally known as International Management Group, which manages sports and fashion personalities and hosts some of the industry’s largest live events, revealed Monday that this year’s Afterpay-sponsored Australian Fashion Week, beginning May 31 in Sydney, will be covered by the government’s Business Events Grants program.
The funding will provide individual grants worth between $10,000 and $250,000 to would-be exhibitors, covering up to half of fashion designers’ eligible expenses for Australia’s most high-profile industry event, IMG said. The program is a part of the government’s Covid-19 Relief and Recovery Fund, which was established to provide relief to sectors disproportionately impacted by the pandemic.
According to IMG, its business events sector “has seen categorical cancellation of events contributing to a near 100 per cent loss of revenue,” and the program’s funding—which is being allocated to high-value, multi-day business-to-business events across multiple sectors—can’t come soon enough. The capital will cover fashion designers’ participation fees as well as fund production for runway shows, bolster the creation of digital content and trade showrooms and pay for travel and accommodation expenses for media and buyers. And it stands in stark contrast to how other nations have responded, or not, to the Covid crisis.
“Securing coverage of AAFW under the Business Events Grants program is another way we are working to ensure that our event continues to be accessible for designers, whose businesses have been greatly impacted by the Covid-19 pandemic,” Natalie Xenita, executive director of IMG’s Asia-Pacific region fashion events group, said in a statement. The program is now accepting applications for grants, she added, and will continue to do so until March 30—or until funding is exhausted.
“I strongly encourage designers requiring assistance to apply,” said Stuart Ayres, Western Sydney’s minister for jobs, investment and tourism, calling the grants a “fantastic initiative to help eligible businesses get back on their feet.” The funding will allow them to “showcase their incredible work on a global stage”—an opportunity that was denied to them during 2020 due to the widespread cancellation of fashion and trade shows.
Prior to the government’s intervention, Afterpay, an Australian company itself, said it would cover the cost of designer participation fees as part of its sponsorship of Australian Fashion Week this year. “Since its inception, Afterpay has had an unwavering commitment to helping Australian brands and designers prosper both in Australia and on the international stage,” it wrote on its website. “Our support of Australian Fashion Week, particularly at this time, is just one way we are working to ensure the strength and success of the industry we grew up in.”
The buy now, pay later solution has become a global payments player outside of Australia in recent years. Along with other pay-by-installments providers, Afterpay has seen a marked and rapid uptick in usage across the Australian market, according to the Australian Securities and Investments Commission’s November data. Its most recent report, which compared data from the 2017-2018 fiscal year with the same period from 2018 through 2019, showed that the total credit extension provided to shoppers by platforms like Afterpay nearly doubled in the country over the course of 12 months, from 16.8 million transactions to 32 million. While the group has yet to release its 2020 numbers, the rise of a global pandemic and the constrained consumer spending that followed have underscored consumer appetites for deferred online payments—and driven exponential growth internationally.
The success of Afterpay isn’t Australia’s only victory in the e-commerce solutions space. The country is squaring up with the world’s tech leaders, as evidenced by the sale of Selz, a competitor to Canada’s globally popular commerce platform Shopify, to Amazon earlier this week. The platform, which develops tools to help businesses launch their own online stores and adds payment options to existing websites, comes as Amazon’s global third-party marketplace and millions of active sellers continue to demonstrate explosive growth. Independent sellers—prime targets for Selz’ expertise—now drive more than half of the web titan’s sales.
Poshmark Down Under
The upswing of Australia’s economy, along with the demonstrably favorable conditions for e-commerce, appears to have made an impression on American fashion resale marketplace Poshmark. On Tuesday, the company announced its expansion into the country just one month after its January IPO. The move is a part of a strategy to “drive long-term growth through international expansion, starting with English-speaking countries,” Poshmark said in a statement.
The peer-to-peer platform said its “scalable model and infrastructure” should enable continued expansion, allowing it to serve “a multitude of countries and categories over time.” Last week, it announced a new pets category, featuring toys, gear and apparel for furry friends, and added beauty last year.
Australia is the first country outside of North America to receive Poshmark’s seal of approval. The California company previously operated only in the U.S., and opened to the Canadian market in 2019. Following that expansion, Poshmark’s active users grew to 1.4 million strong within a year. Founder and CEO Manish Chandra characterized the company’s latest launch as a starting point for “building a thriving and successful community in Australia.”
“Poshmark’s community has only become stronger and more dynamic as it has grown,” he added, “and we are thrilled to welcome Aussies to join us as we shape the future of shopping, together.”