Globalization affects all sectors including Luxury goods. In the past, Luxury was reserved for a Western elite but with the democratization of the latter, it transcends now borders. Emerging countries offer new perspectives for Luxury Houses.
Luxury houses cannot rest on the recipe that has made their success in the West in terms of marketing and communication strategies. They must be rethought in each country, according to cultures and aspirations of the clientele to maximize the influence of these Brands.
Therefore, in order to attract this new clientele, historical groups of the Luxury sector evolve their logic of “made in” to a “made for”, respecting more the culture of these countries. Three strategies are highlighted here:
1. The adaptation strategy, for which Luxury Brands only lead punctual actions such as the creation of exclusive model for the local market in a limited edition.
Thus, to celebrate the Chinese New Year under the sign of the dragon, several Brand Names have launched specific products. For example, the Versace House proposed for the 2012 Chinese New Year, a limited handbag edition , covered by gold and precious stones. The gem was only available in 210 copies around the world.
2. The integration of a local brand strategy, which offers to Luxury Houses big facility to adapt themselves. Luxury groups show a growing interest for local Brands.
In 2008, Estee Lauder, one of the leading manufacturers and sellers of skin care product, cosmetics, perfume and hair care products in the world, sharing capital of the Indian private company Forest Essentials. This is an upscale / Luxury Brand inspired by Ayurveda cosmetics, traditional natural medicine born in India more than 5,000 years ago.
The Creation strategy entails to launch a Brand echoing local cultures. This strategy relies on the long term, which explains its complexity. This is a gamble made by Hermès in 2010 with the creation of the brand Shang Xia.
The Brand Shang Xia was mainly created by the French group Hermès to conquer the Chinese market. That explains why Hermes recruit the designer Jiang Qiong, also CEO of the company which Hermes owns a 90%.
3. The Communication of Luxury Houses in emerging countries
In Asia, in China and especially in Korea, they have a cult of Western beauty, which is a symbol of success and wealth. Luxury Houses tend to include in their communication campaigns asian muses for the concept of identification. Nevertheless, Asian also appreciates that Luxury Brands are represented by international figures, which brings added value to the product, as well as the Brand associated with.
One of the reasons of the success of Louis Vuitton in this market is because they perfectly understood the importance of differentiation of two aspects: export a purely French product, but also use local sales force and local muses.
In fact, they call on Chinese figures highly respected for their sense of taste who enjoy a special aura to appear in ads broadcasted in China. For example, the famous actress Fan BingBing is the face of the range of bags “Epi” signed by Louis Vuitton in China.
Gamble succeeded as well as the watchmaking company Tag Heuer, in the country with great potential but very attached to its culture that is India. Tag Heuer House was able to harness the celebrity quotient appreciated by Indian people and strike directly the clientele heart. In other words, it was chosen as the official representatives, Bollywood actors such as the big star Shah Rukh Khan or Priyanka Chopra.
Previously, we have seen that the Luxury was assimiliated with the idea of rarity and customization. Every client is unique as well as every single product offered to him. Thus, Luxury Houses wishing to establish themselves in new countries of Luxury, optimize their chances of development by adapting their strategies and their communication to the host countries, while keeping their DNA and the aura surronding the Brand.
Globalization affects all sectors including Luxury goods. The evolution of this sector leads us to wonder about the limits of these advances. A future for foreign Luxury is it conceivable?