Lady Gaga - million reasons
The luxury logic in emerging markets is a growth story that needs attention and documentation What intrigues me is how come consumers of Brazil, Russia, India and China BRIC countries now account for around 18 to 22 percent of the luxury market in the world luxury market is growing at 20-30 percent in these countries and it is estimated that the BRICs will contribute about 36 percent of the global luxury market by 2015 and plans to have the largest database of luxury consumers.
The recent financial crises of 2008 revealed that the luxury industry is not immune from the crisis The crisis originated in the financial sector in the US, Western Europe and Japan and have been most affected by the crises also as we all know, France is the author of most of the luxury brands, followed by Italy, however, their largest market after the European continent is Japan which was hit mainly by the country's crisis which is actually bear the burden of the crisis or revolves around the crisis for luxury goods is China Russia wealth, knowledge and experience in luxury; he sees a luxury goods consumption potential in two of its cities, Moscow and St. Petersberg For China, it is a story quite different; it is the luxury industry's growth engine today, growth is exponential the last 6-7 years Although we always saw China and India as the dragon and the elephant, consumers Chinese want luxury outside the visible products and focused on the status of Chinese consumers are showing a symptom called out phenomenon - a situation where, in a long term limit or restriction has been removed and thus the exuberance and urgent need to experiment and have all the good things in life, it is a market that is largely driven by the logo strategy.
consumers of the other Indian luxury are value conscious and are constantly on the lookout for products and elegant and aesthetic services that are complementary in nature crafts and values are important to refer to an Indian consumer and, thus creating long-term relationships and the entrance and business development in India is difficult for most luxury brands Louis Vuitton can only boast the advantage in the luxury space industry Indian luxury consumer expectations are also very varied in the BRIC Chinese luxury consumers want above all visible from the outside and drives products that status, in the jargon is called luxury most strategy logo as the logo tend to show; demonstrate more clearly the products can be eaten Indian luxury consumers are different - they are more aware and probably looking to customize their needs so that Chinese consumers want today are not what Indian consumers want today, Russia, consumers expect luxury goods to have a balance between tradition, modesty and wealth and it is interesting, Russian consumers were generally seen to buy goods that have much higher price than that they are usually sold because they like to show they can spend that amount of money for a product value so finding, the consumers of these countries have become increasingly aware and conscious not only of quality, but also the status.
Brazil, a country that is very rich with vast natural resources, including precious stones, has another story to tell There are more than 180 million consumers and strong financial management, which played a role in maintaining foreign investment to leave the country the luxury industry in Brazil is enhanced by the presence of sufficient natural resources, including precious stones like emeralds and tourmaline, which allow companies like to be fully integrated into the mines retail industry fashion in Brazil is very dynamic and can produce everything in-house, but so far it has been focused on the domestic market, however, given the local know-how for building brands, we can see emergence of more Brazilian brands creating international companies there is a billion customers here and the potential of these customers for luxury goods a huge landscape where there are challenges, strengths and weaknesses.
The first major challenge in these markets is education and knowledge of the luxury industry Our experience has shown that education has made a difference in the luxury industry and those who know the product would compare, contrast, see and find out what they like before buying it is indeed important for the luxury industry to understand the demand and the market as there is no overall strategy for the industry as the second challenge is the size and the population of the countries of the BRIC countries are the most populated in the world If we take these four countries together, it is close to over 3 billion people, or half of the world population, these countries have brands that have been success in the past, but they are not known globally as French or Italian brands can not be true, however, that consumers in those countries would only like marks that are s developed countries of the world, such as France and Italy th ird challenge is distribution-in countries like France and Italy, we could have attended 3-4 high-streets, where most luxury shops are located, for example, puts me Fri, Avenue Montaigne, Cambonne street in Paris, which are known as luxury shopping centers, but in countries like China, India, Brazil and Russia, yet many destinations exclusive luxury can be found.
To return to our key question of the logic of luxury in emerging markets, it has no easy solution Hermes launched Shang Xia, a local luxury brand in China - a brand that would be made in China, for China, and sold in China with its first store in Shanghai, it is the first time in its history that Hermes has created a separate brand and it is the first time in its history it will incur income from products manufactured in China Exclusive, limited production and high quality manufacturing in France were part of its DNA since the brand was created Unlike Louis Vuitton or Gucci, Hermes was, strategically, a much slower pace of expansion in order to preserve the exclusivity and maintain its position of a true luxury brand Chanel secondly launched specific collections with the Chinese consumer in mind the last look is a long thin dress in a rich fabric OPUL ente, slit to the thigh on each side to provide an overview of a contrast lining that this style borrows from tra Chinese cheongsam TION is probably no coincidence in a sense, we see some companies follow completely different strategies in the same emerging market a brand has a product for a particular market thus clearly distancing its original product in the local market while another brand has adapted its product to the local market without distancing its brand DNA Finally, India is a market of the future and therefore what should be the business strategies must imbibe and follow to succeed in this market -the path will not be easy for luxury brands.
The size of the emerging market needs a challenge, not only geographical distribution, but also the size of the population this means a marketing and sales perspective, there are many millionaires and many needles hay geographical spread to succeed in these markets one needs to know and learn to look for needles in a haystack consumers in emerging markets believe in investing and not consumption, and therefore the marketing dynamics are quite different of that received from developed countries such as France or Italy be prepared with deep pockets and less an investment cycle of 3-7 years and be prepared to deal with the bureaucracy and compliance.
The logic of luxury in emerging markets is different, it can not be generalized Each emerging market requires a dedicated approach Be prepared to spend time in educating your consumers.
The luxury basic principle is to tell stories tell the story might be the best way to popularize a niche brand The end user gets some points and of course has something to tell his friends.
Chinese consumers are brand conscious while Indian consumers are very value conscious, not necessarily price-conscious Once Japanese consumers, Chinese, Russian and Indian consumers will probably be the luxury industry's growth engines and therefore needs rethinking luxury emerging markets.
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