In my
most recent article, I described how The
Cult of the Luxury Brand, Radha Chadha and Paul Husband’s book on the
luxury industry’s growth in Asia, could be used to predict the industry’s
growth on that continent.
Their book contains a model for the development
of luxury consumption in Asia, the “Spread of Luxury” model. In that model,
countries advance through several stages. Each stage corresponds to not only a
different economic development level, but also a different level of luxury
goods consumption. Those stages range from “Start of Money,” in which few
consumers purchase luxury goods, to “Way of Life,” in which a country’s luxury
market is fully saturated. According to Chadha and Husband, the “Way of Life”
stage is the end stage for Asian markets as they become fully developed.
In using
the “Spread of Luxury” model to estimate luxury goods conglomerates’ future
growth, I will start with LVMH group (LVMHF) (LVMHY). LVMH owns brands such as
Louis Vuitton, Bulgari, and Marc Jacobs. It is the world’s largest luxury
company, with about three times the sales of its biggest rival.
To apply
the “Spread of Luxury” model to LVMH’s operations, we first need to see what
its sales in Japan and Asia outside Japan are. This is actually a surprisingly
difficult question. (Read More)
No comments:
Post a Comment