Minimum of 300 words, would help if you put more. Read the mini case \"LVMH and
ID: 1155256 • Letter: M
Question
Minimum of 300 words, would help if you put more.
Read the mini case "LVMH and its Empire of Desire" Louis Vuitton is the company's flagship brand. Part of its appeal is that it bestows exclusivity on its owners. In the last few years however the brand logo has been applied to handbags and accessories at an unprecedented rate, and the products are increasingly being bought by "middle class" consumers 1. Why did LVMH become so successful in China? 2. What are the challenges faced by the company as the Louis Vuitton brand becomes more and more common in China and less exclusive?Explanation / Answer
1.
Sales have more than doubled in China in the last decade. The growth of the Chinese economy has led to an explosion of millionaires. They are willing, and, ready to spend on high-end brands such as Louis Vuitton. The number of millionaires in China has increased by 50 percent. Most of them are under 40 years of age. The consumers love the glam, and, glitz of donning Louis Vuitton bags. The Chinese nationals have buoyed & kept the luxury markets solvent. 25% of revenues come from Asian countries, Japan separately accounts for 9 percent of the sales. These goods are in demand at stores in Hong Kong, Beijing, and, Shanghai. The tourists have dominated sales at flagship locations throughout Europe & on New York's Fifth Avenue. The goods in these regions are 30 percent cheaper than the LVHM goods in China. China is expected to be the world's largest market for luxury goods in the coming decade. By 2020, it could account for more than 40 percent of the total sales. The brand has status, and, tradition that makes it unique. The demand for Louis Vuitton goods will appreciate if the Government allows the Yuan to appreciate. Import of Louis Vuitton bags will become less expensive. As per CLSA, Chinese buyers are Louis Vuitton's biggest customers.
2.