What factors contribute to LVMH’s success in the Chinese market?
In my opinion, LVMH is highly successful in China primarily because its prices and glamorous prestige are reflected onto its clients. The Chinese luxury clients highly value being recognized as wealthy elites with a high societal position. Additionally, ever since their establishment, LVMH has had a completely unique heritage and craftsmanship that makes the brand very appealing to clients. Another reason why the Chinese people love Louis Vuitton is the fact that in their crowded and communist society, they feel the need to stand out and be noticed. Louis Vuitton has understood this and knows how to make them feel unique and special, thereby enhancing their vanity and self-esteem.
The study shows that Louis Vuitton is a successful luxury brand in China, with more than 33% of its profits coming from Asia. It also mentions that Asian sales grew by 27% between 2008 and four years later.
2. The flagship trade name of LVMH is Louis Vuitton.
Louis Vuitton’s appeal lies in its ability to provide exclusivity to its customers. However, in recent years, the Louis Vuitton logo has been used on wallets and accessories more frequently. This poses a challenge to the brand’s value. In response, LVMH has introduced luxury products without displaying the logo. I believe this is a good decision because the main reason why customers remain loyal to the brand is the belief that wearing their products makes them part of an elite group and gives them a higher social status. This also sets them apart, making them unique individuals. Owning an LVMH product adds value, sets them apart from others, and provides a sense of self-esteem and pride. This is especially important for Chinese consumers given their society’s values.
If the trade name’s logo becomes widely used by counterfeiters, the value of the merchandise decreases, leading to decreased interest from customers who want to be able to distinguish themselves. However, I believe that LVMH’s decision to change their production method is a smart move that both keeps their customers satisfied and stops counterfeiters. LVMH customers can still trust the brand to provide unique products and complete satisfaction. Additionally, LVMH is also dealing with the problem of excessive counterfeiting of their LV logo. To overcome these threats, LVMH can utilize their strong reputation and the high standards of luxury and quality that their experienced customers expect. It is LVMH’s responsibility to ensure the exclusivity and uniqueness of their products and accessories, which are increasingly at risk of being counterfeited.
In addition to posting an official list on their website of authorized shops selling authentic pocketbooks and accessories, they could consider abandoning the frequently forged logo and adopting alternative methods to differentiate their luxury goods. One potential option is to exclusively use certified materials known for their superior quality or establish exclusive partnerships with suppliers who can provide unique natural materials that set LVMH’s products apart from competitors and counterfeiters. Another strategy they could employ is to produce one-of-a-kind items, ensuring that no two identical models of the same pocketbook or accessory are available in a given country.
Despite the challenges and expenses, I believe that employing this approach could guarantee the distinctiveness of their merchandise, bringing contentment to Chinese luxury enthusiasts and instilling pride in their purchases. LVMH is strategically working towards persuading Chinese consumers to buy their products domestically rather than overseas. Despite the allure of lower prices and greater opportunities for showcasing their shopping choices abroad, LVMH endeavors to redirect Chinese customers towards purchasing their items within China. To accomplish this objective, they have restricted the availability of leather goods in the European market and reduced operating hours at select European locations such as Paris, a highly sought-after shopping destination.
LVMH is committed to delivering outstanding services in Chinese stores, regardless of any potential price variations, with the aim of ensuring customer satisfaction. Their objective is to provide exceptional treatment and attention to customers, while also assuring the highest quality products. Considering the criticism towards excessive spending in China, it is advised that LVMH concentrates on meeting the requirements of a specific market segment that highly esteems pride and self-confidence. By offering distinctive and premium products tailored for this segment, they should consistently prioritize their needs.
In my opinion, it is essential for LVMH to continue operating as long as they can meet the specific market demand for high-quality luxury products. They should pay attention to changes in customer buying behavior and preferences in order to maintain and reinforce their brand image and trust. LVMH has already established itself as a highly desired and exclusive empire in Chinese society. I strongly advise them to uphold their standards and brand image, which are synonymous with a distinctive and upscale way of presenting exceptional and unique criteria. Additionally, other luxury brands like Chanel, Burberry, and Gucci are also entering the thriving luxury goods market in China. Hence, it is crucial for LVMH to take appropriate measures to maintain its strong position in this market.
In my opinion, LVMH does not need to enter the luxury-goods market in China as its competitors do. The limited products and availability can be seen as unique and special. I believe LVMH’s strategy to establish, grow, and maintain a strong presence is effective and should continue. However, they should consider customer preferences and their competitors’ strategies and uniqueness. They should focus on improving product quality and ensuring premium services and employees for customer satisfaction.
