Asia’s luxury market regroups in the face of recession

Isaac Mostovicz writes that Asia's luxury market is in flux as it searches for a different kind of customer...

3769584987_08a076f033

The global recession has caused many luxury brands to re-think the way they do business and cater to affluent clients. Across Asia brands are decamping from once-profitable markets such as Japan and turning their attention to emerging luxury markets.

For example, Japan, once seen as a luxury hub of Asia, has seen Gianni Versace SpA announce plans to close its Japanese stores, pull back from the market and re-think their strategy in the face of declining demand.

Meanwhile China has seen its standing as a luxury hub in Asia increase. Bloomberg reports that in China luxury-home sales almost tripled in September from a month earlier. The luxury car market in China is also doing well. Reuters reported earlier this year that Mercedes-Benz saw a 52 per cent increase in sales in June from a year earlier.

Luxury brands are also beginning to focus on non-traditional markets.

In Mongolia, luxury brands Louis Vuitton and Ermenegildo Zegna will open shops in the capital’s main Sukhbaatar Square. According to the New York Times, Mongolia has a per capita gross domestic product of about $1,800 in 2008. Because of that, the luxury market is extremely niche. Brands are betting that niche will want to spend money on luxury items.

You say of this article...

Bookmark and Share