The increasing purchasing power of a certain class of consumer in the developing world has enticed many Western luxury brands to set up shop there, particularly in the fast-developing economies of China and India. This phenomenon has led to sales in Asia surpassing the West and increased concentration of marketing activity outside these brands’ traditional markets.

But what will happen when these emerging markets develop to the point when their local brands press to compete for a share of the luxury market, both at home or abroad? And what if these same brands become rich enough and global enough to seek buy-out opportunities of established Western luxury brands? In other words, will the forces of globalisation be allowed to flow in both directions?

In an article in the Financial Times from 11 January, the authors argue that:

companies from the developing world fight against entrenched perceptions when they attempt to buy high-end western names.

They point to recent examples of the Indian hotel group Taj indicating interest in acquiring Orient Express Hotels, Trains & Cruises and Tata Motors bidding for the Jaguar and Land Rover brands.

As luxury products are often associated with their provenance, the next wave of acquisitions will test emerging market-based multinationals’ ability to finesse their way through luxury brand retailing.