Luxury’s Asia fascination continues

Isaac Mostovicz writes that forced portfolio diversity is painful now for luxe brands, but in the long run they could be better because of it....

asia

Appearing in Slate Magazine earlier this week was a feature about the luxury market’s continued move into Asia.

The article starts out by explaining what many already know, and indeed what I’ve written about previously: That the current markets — including Japan — have hit a wall. These rapidly receding markets have forced many luxury brands to diversify their market portfolios. Often, this means investing in uncommon Asian markets.

As more individuals in Asia accumulate enough money to satisfy their daily needs and begin to have confidence in their long-term prospects, they’re interested in demonstrating to themselves, their neighbors, and anyone they happen to meet that they, too, have joined the club. In a very real way, Asian buyers are getting both the best-made product they can finally afford and an aspirational brand at the same time. They’re making a leap from the 19th century to the 21st.

In effect, what we’ve got is a continent of newly-wealthy Lamda personalities who are keen to set themselves apart from their peers by displaying their new status with luxury buys.

There’s pain right now in being forced to diversify rather than doing it out of a larger strategy, but in the long-run these brands may be better off for it. Once the recession comes to a close, buyer confidence will return.

If enough time and resources are put into developing the Asian market, by the time the West comes back into the fold, luxe retailers will have greater market penetration and additional revenue streams in places they otherwise would not have had.

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