The Asian market is offering a lot of opportunities. As it's an emerging market (except Japan), there is a high growth rate with a global increase in wealth. Consequently, Asians are becoming richer and have more purchasing power. So the propension to consume luxury goods is quite important. Furthermore, this is a vast market with a huge population. Buying luxury products is really common trait in the culture of Asian people. There is a constant high consumption and attraction for luxury products. Asian consumers are really addicted to luxury brands. For example, some Japanese or Chinese people don't hesitate to spend more than the half their wage or to loan money just in order to buy handbags! In addition, China's taxes on revenues are lower and people spend less money for their accommodation.
[...] II) Internal analysis Strengths Brand recognition: LVMH and especially Louis Vuitton are the most famous and popular luxury brands in Asia. So there is high brand awareness and a good image. Leading position: LVMH is the leader of luxury goods in Asia. It is the world's largest luxury-goods maker. High quality products: LVMH focuses strongly on the quality of their products. They have a high level of auto-control and high quality materials. Most of their products are hand made and produced in France or Europe. [...]
[...] are the biggest success of the luxury market in Asia” said Bernard Arnault. For example, in June 7th 2006, the first Louis Vuitton fashion show in Asia was organized (more precisely in Tokyo, Japan). It was an important event because it was the first show to be staged outside Paris and the first time that a luxury brand made a real show in Asia. So one more time LVMH has an advantage over its competitors. It joins another point which is the good communication and image of LVMH in Asia. [...]
[...] Besides, LVMH is a luxury group which has most of their shops in Asia (more than its main competitors PPR, Richmond, Chanel etc.) Huge Investments: About 565 millions euros in 2005. LVMH invests a lot and continuously. They are constantly proposing new and innovative products for their customers. High profitability: Its turnover increased by 15% in the 1st half of the year 2006 and they confirm a strong growth of the results in 2006. "The products in our group, such as Louis Vuitton, Christian Dior and Fendi, are extremely successful" said Bernard Arnault. [...]
Online readingwith our online reader
Content validatedby our reading committee