Louis Vuitton in Japan
The Japan market is ranked the greatest consumer of luxury items. In order to supply the needs of this market, the top global luxury companies have in recent years, scrambled the Japanese market to establish their own brands in this country. It is estimated that Japan consumes close to 30 per cent luxury goods, which is twice the percentage consumed by Europe and America. Therefore, this is another factor, which has contributed to many companies struggling to establish their market and brands in Japan. The Japanese market is promising and mature, as it was able to survive the long global economic recession. Therefore, luxury firms are all competing to earn more profits in Japan. Louis Vuitton (LV), of French origin, is the biggest international luxury company, which has equally managed to establish its market in Japan. This company has one of the highest exposures in Japan, standing at 33 per cent. This relatively high exposure rate has had an impact on the overall Japanese market.
Luxury items are important as they correlate with a country’s GDP. During the period of economic booms, the demand of customers for luxury goods often peaks. On the other hand, recession results in a lower demand for luxury products. However, this is not the case for Japan market, which maintains a constant demand for luxury during both recession and boom periods (“Japan Venture” Web). Therefore, luxury companies, including Louis Vuitton, experience steady profits in Japan, despite the occurrence of strain on the global economy. Today, many market experts and analysts have predicted that the effect of global recession on consumption of luxury will continue to be negligible in Japan. They attribute this to three major factors, including Japan’s mass consumption of luxury items, the global travel of its consumers, and the influence of Japan markets and other Asian markets.
According to Japan Market Resource Network, the sources of identity for both men and women in Japan have continued to change because of the change from traditional social codes (4). The type of luxury brand Japanese choose today is influenced by their desire for self-expression and their high individualism. Japanese consumers today, unlike in the past, are highly individualistic, and therefore, this aspect influences their choice of product. A research by Japan Market Resource Network (JMRN) indicated that many Japanese consumers love a sense of uniqueness. Therefore, most adult and single women do not buy brands that are common with other people (5-6). In the case of Louis Vuitton, the aspect of individualism of the Japanese resulted in considerable adverse results since this company did not embrace that in its brands. The CEO of Louis Vuitton in Japan once claimed that 44 per cent of women in Japan own a Louis Vuitton bag, without the inclusion of other accessories from Louis Vuitton. Considering the level of individualism in Japan, the JMRN research showed that this kind of high penetration might have a negative impact on the Japanese market. An interview with different Japanese women showed that the high visibility and penetration of luxury brands results in the decrease of it aspirational value, thereby evoking unresponsiveness in the market (7). The JMRN’s research identified Botega Veneta, an Italian luxury company as one that is capable of succeeding in the Japanese market due to its responsiveness in addressing the need of Japanese consumers for unique brands. Japanese consumers therefore have claimed that the high penetration and visibility brands of LV, Polo, and Prada, are not worth their premium prices. Nonetheless, this market dilution of LV did not rhyme with the Japanese individualistic nature (8).
According to Husband and Chadha, the Japanese and other Asians adore luxury products of European origins and not Asian (96). The local fashion designers in Japan have no influence in the fashion industry. Nearly all the Japanese shop their luxe from the foreign fashion companies such as Louis Vuitton, Hermes, Gucci, among others, which are established in Japan. The reason for this is that western brands are more superior in the fashion world, as compared to Japanese and Asian brands. This country-of –origin effect has seen many Japanese shop their luxury gods from Louis Vuitton, the world’s largest luxury company (97). The Japanese appreciate European luxury goods, as they believe Europe is the origin of a luxurious tradition and luxury goods as well. This saw the local designers imitating and incorporating the European designs in their own design, in order to attract more sales (98-99).
Similarly, the JMRN research discovered that the Japanese would equally not purchase European luxury brands manufactured elsewhere, such as French brands manufactured in Japan or China (8). They wanted to buy the original imported brands. Since Louis Vuitton brands were imported, high quality, and were expensive, many Japanese shopped here. This also was in addition that Louis Vuitton is the largest luxury company in the world, and hence the assumption that its brand is trusted. This aspect led to increased counterfeiting and falsification of the Louis Vuitton brand in the Japanese market. The greatest producer of Louis Vuitto counterfeit products was China. It was hard to differentiate between the fake Louis Vuitton bags and the genuine Louis Vuitton bags. The Japanese therefore bought fake Louis Vuitton bags; however, they used them for events that are more informal. This played a big role in transforming the Japanese perspective of quality of luxury brands. In addition to the effects of the Asian recession, the Japanese gave up on their attachment to high quality products (“Japan Venture” Web). This change in the perspectives of the Japanese consumers about product quality, concurrently affected the Japanese market, with its players (“Japan Venture” Web). Nonetheless, this situation called for government intervention.
In conclusion, the Japanese market was the greatest buyer of Louis Vuitton luxury products during its golden age. This was influenced by the Japanese value of quality and taste. Louis Vuitton is known to produce high quality products, an aspect that the Japanese were drawn to. However, things changed when Japan was hit by an economic recession, which lasted for quite long. Louis Vuitton could not make the vast sales it made before the recession as most Japanese consumers had changed their perspectives on different aspects of luxury products. Nonetheless, Louis Vuitto greatly contributed to the changes witnessed in the Japanese market, since it had a big influence, being the world’s biggest luxury company. The high penetration and visibility of Louis Vuitto did not measure up to the market demands of the Japanese, as they were a highly individualistic society, which embraced uniqueness. This led them to think that shopping for Louis Vuitton was a waste of their money, and hence, resulted in the change of buying patterns in the Japanese market as people looked for brands that would satisfy their needs. Similarly, this high penetration and visibility of Louis Vuitton led to the further decline of local luxury brands. This resulted in the production of counterfeit Louis Vuitton products in the Japanese market in order to compete with the Louis Vuitton brand. The Japanese were compelled to compromise their value for quality, as it was hard to distinguish between the real and the fake brands of Louis Vuitton.
“Japan Market Resource Network.” Japan’s Changing Consumer. Drivers of Change for Luxury
Brands. n.d. Web. Retrieved 10 December 2012 <http://www.jmrn.com/UserFiles/File/DCLB_JMRN.pdf>
“Japan Venture.” The Japanese Market. n.d. Web. Retrieved 10 December 2012
Husband, Paul & Chadha Radha. “The Cult of the Luxury Brand: Inside Asia’s Love
Affair with Luxury.” New York: Nicholas Brealey Publishing, 2006.
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