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...


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.

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