While the focus on emerging markets for the big international clothing companies has traditionally been to view them as outsourcing opportunities, there are a lot of people with a lot of money in these countries. So go-ahead Western brands are seeking to gain a presence in emerging markets, hoping to reap dividends as their economies grow.

Take Brazil. Its clothing brands have been notorious for their poor quality over the years, and Brazilians have typically turned to foreign designers when they shop. Foreign brands are associated with status in this Latin American county.

Several international luxury brands have set up in Brazil over the years, typically using São Paulo as a base because of the city's higher wages and massive population (it exceeds 10m).

Shopping centre chain Grupo Iguatami has courted and landed outlets for brands such as Gucci and Prada. And in its most recently opened Shopping JK Iguatami centre in São Paulo, UK high street brand TopShop has a presence, its first store in Brazil.

But operating outside the major urban centres such as Rio and São Paulo can still be difficult for the major international players. Poor infrastructure, logistics, high taxes, and red tape have prevented foreign clothing companies from setting up in more remote parts of Brazil, such as the north and northeast regions.

And they also have to compete with those Brazilian companies who have grown to be weighty competitors, such as Riacheulo, owned by the retail chain Grupo Guararapes that owns its own bank helping its consumers finance their purchases. The clothing chain originally started in the northeast of Brazil and now has locations throughout the country.

Asian growth tells a similar story
In Asia, there is a similar story of growth that can be exploited by the big global brands. Vietnam's garment industry is expanding fast. Swiss market services group DKSH noted in a recent statement in the Vietnamese daily Thanh Nien News: "Asia is no longer simply the extended 'workbench' of the West - it is developing into a continent with strong domestic markets."

It helps in Vietnam that international majors are striking joint-venture deals with local companies. According to research by PricewaterhouseCoopers in a 2012 outlook report, Vietnam remains an attractive investment location given its lower labour costs than China.

And joint ventures mean production can be local without compromising quality. In August last year, for instance, the Vietnamese Phuoc Long Joint Stock and the Japanese Sumikin Busan Group began building a US$1.1m garment factory producing goods for Burberry and DKNY.

UK brands Zara and Georges and Spanish label Mango also manufacture in Vietnam. Inevitably, these brands end up in Vietnamese shops. Burberry and Mango both have outlets in both Hanoi and Ho Chi Minh City (HCMC), for instance.

Smaller bespoke outlets such as L'Usine, a HCMC-based boutique stocking local and expat designers with a café attached, have seen their popularity rise in recent years and many of their products - such as high quality wallets made from rice or pig feed bags - are exported to New York or Paris.

In China, international clothing companies have been looking to buy shares in Chinese brands and retailers, in part to gain traction in China's growing high-end clothing markets.

In July of this year, Francois-Henri Pinault, CEO of the Paris-based PPR Group - which owns luxury brands Gucci and Yves Saint Laurent - told Hong Kong local media that the company is "in discussion to buy a luxury Chinese brand."

This move, he said, was being made to tap the Chinese market, which is expected to top Japan in 2012 as the world's largest market for high-end products, according to US-based global management consulting firm McKinsey & Company.

And PPR is not alone in its business decision. In February, its rival, French multi-national apparel company LVMH, paid US$200m for 10% of stocks in Trendy International Group, a Guangzhou-based casualwear company which owns over 300 stores in China, and four major brands, including Ochirly, a popular brand among young Chinese female office workers.

In December 2011, LVMH also bought stakes in Xiamen-based Xinhe Fashion Co, which owns the domestically renowned brand Jorya.

"China's importance to the global luxury market is obvious, but still, luxuries only target a very small group," Ouyang Kun, CEO at the Beijing-based World Luxury Association told just-style. "By acquiring these domestic companies, luxury companies can instantly reach a much wider, fast growing consumer group."

Lack of incentives for Indian brands
In India, foreign brands which have launched retail stores in this huge market have yet to display the same keenness in establishing their own manufacturing facilities in the country, preferring to outsource to local companies under licence.

The only difference according to Harminder Sahni, managing director of consultancy firm Wazir Advisors, is that they are now setting up their own India-based buying offices instead of using agents. He names Gap, Walmart and Marks & Spencer as examples.

And in future, the big brands (and even Indian brands) might choose to source or locate manufacturing in neighbouring Bangladesh. According to Chandrima Chatterjee, director of the Economic and Consultancy group at the Apparel Export Promotion Council (AEPC), many Indian brands are testing Bangladesh for setting up production units there.

"The system is no more favourable to get all the manufacturing done in India", she says. One influential factor has been Indian government's September 2011 decision to grant duty-free access to 46 garment products from Bangladesh.

These Indian clothing brands need all the cost help they can get from relocating to Bangladesh. Some have been trying to make a splash in Western markets but in vain. European markets have seen the presence of some Indian brands such as ColorPlus and Genesis Colors, or those of luxury designers including Manish Arora or Rajesh Pratap Singh, but these brands have been confined to only a few centres.

Sahni blames this failure on a lack of incentives for Indian brands to really push their wares: "When everybody else is coming to India why should they need to look outside?" he asks.

Long-standing and successful Indian companies supplying manufactured garments for foreign brands are not usually interested in starting their own brands, he argues. "They are just tailors and don't understand branding, not even in India."

With additional reporting by Sheena Rossiter, Raghavendra Verma and Helen Clark.

Click on the links below to read other articles in this management briefing:

just-style management briefing: Suppliers developing their own design hubs

just-style management briefing: Outsourcing with the BRIC countries

just-style management briefing: New outsourcing players challenge export giants