Louis Vuitton Japan

Louis Vuitton Japan

Japanese Luxury Market

With the growth of the Japanese economy, the country had transformed into the fashion capital of high-end products in Asia. A number of luxury brands have followed suit to launch their products viewing the demand in Japan. HSBC in 2009 reported that Japan accounted for more than 45 percent of the global sales of luxury products. A number of luxury analysts believe this percentage to be fabricated and the sales account for a lesser number. Though the country had been the luxury capital, some analysts believe that Japan generated 12 to 40 percent of global luxury sales (Keenan, 2001).

In any condition, the market for luxury items in Japan has been the source of stable sales for companies. The percentages discussed above represent the volume in which such items in Japan are preferred and the potential that the market continues to hold. The competition in Japan for luxury sales is severe. Brands such as Bulgari consider the Pacific state as their foremost priority in terms of sales. There are others such as Francesco Trapani, Burberry, Gucci and Salvatore Ferragamo, in addition to Louis Vuitton vying for the top position in Japan. This is symbolizes the stiff competition brands face in order gain customer attention and increase sales of their respective product lines. Moreover, brands like Coach and Tiffany, Japan is the second largest market in terms of sales (Finkelstein, 1991).

It is astonishing to notice that even with Japan's relatively small geographical size, in comparison to the United States; the demand for luxury goods outscores that in any other country on the globe. The intensity of competition can be assessed by the fact that within Japan's small geographical region luxury brands have established hundreds of stores.

However, in 2007, when the financial crisis struck the global economy, demand for luxury items, even in a country like Japan, has declined significantly. With reduced buying power, luxury item sales have taken a severe blow. Given the strict competition, the economic crisis has served only to prompt the companies to reassess their prediction for demand among Japanese consumers. Louis Vuitton, Bulagri, Coach and Tiffany and other brands are now faced with the challenge of lower-tier brands that are offering similar quality with significantly lower prices(Synodinos, 2001).

However, one brand form Sweden, H&M, entered the Japanese market for fashion and revolutionized the local market. The company was smart to introduce a fast fashion concept. Keeping in mind the success H&M enjoyed in 2008, brands such a Zara ventured into Japan, and with their innovative business models, began to compete with luxury brands such as Louis Vuitton and Bulagri. Affordable prices were now the new mantra in the Japanese market and altered the perception of Japanese consumers that had traditionally sought to purchase luxury products (Eckhardt & Houston, 1998).

Mindset of Japanese Consumers

The culture of Japan has traditionally been one in which people have strived to possess luxury items as a means to show-off their social ...