Tuesday, October 2, 2012

Louis Vuitton Risks Logo Fatigue in China

Hunter Communications recommended reading from:
Business Week

Link to Article:
Louis Vuitton Risks Logo Fatigue as Chinese Tastes Mature

The newly-affluent Chinese are voracious consumers of luxury goods, with their nation zooming to fifth in the world in the luxury market.  Now there are signs that flashy, label-oriented brands like Louis Vuitton and Gucci that ruled the Chinese market in its early days have peaked. More mature consumers are turning to brands whose value is seen as connected to their materials and build quality instead of logos.

Excerpt: "Luxury-goods makers early into China have long counted on consumers there to snap up $1,000 handbags and other pricey -- and profitable -- wares. Now, Chinese tastes are changing in ways that may hurt the brands that expanded most aggressively in the country.

As more Louis Vuitton (MC) bags, Gucci wallets, and Omega watches flood cities like Beijing and Shanghai, consumers are eschewing readily available logoed products in favor of more distinctive alternatives.

'As the luxury industry matures, the Chinese are becoming much more sophisticated about the products that they buy,' said Fflur Roberts, global head of luxury goods research at Euromonitor in London. 'It’s not just about the bling aspect.'

The shift to less conspicuous and often more expensive goods, which happened in Europe and the U.S. after the 2008 collapse of Lehman Brothers Holdings Inc., may dent growth at Vuitton and Gucci, which until recently sold more than half the luxury handbags in the world’s second-largest economy, HSBC estimates."

No comments:

Post a Comment