As countries like China grow and mature, a budding middle class become “aspiration” buyers – looking to famous brands to show off their wealth. Not every merchant approaches these markets in the same way. Chanel, for instance, is expanding in Asia more cautiously than Louis Vuitton. Chanel wants customers to buy into the entire brand, considering Chanel a lifestyle. They want to offer shoppers their full line of clothing as well as their iconic handbags. In doing so, they are seeking the more sophisticated buyer; the newcomer’s first purchase tends to be costume jewelry or a handbag. Louis Vuitton, on the other hand, is content with selling only accessories; this approach is quicker and less expensive. To sell a clothing line requires more space and a considerably bigger investment in inventory and trained salespeople.

China is an especially appealing market because the Chinese have not yet latched onto one particular brand. By contrast, the Japanese are famous for their devotion to identifiable logos and especially to Louis Vuitton. It has been reported that over half of Japanese women over 20 years old own a Louis purse; an astonishing 94 percent of Tokyo women in their 20s are said to carry bags with the signature LV print.

This leaves the door open for “dark horse” brands, and will doubtless lead to tough competition as well as creative marketing. Near the Place Vendome in Paris, Chinese tourists arrive by the busload, and file politely into a specially-designed showroom (known as the China room) at jeweler Buccellati. They are welcomed and encouraged to buy key chains and other inexpensive objects that will serve as entry-level introductions to the brand. Buccellati, maker of exquisite silver pieces and fine jewelry, is certainly not a household name in the U.S. But give them ten years, however, and they may become the must-have accessory for those strolling Shanghai’s Bund or Dubai’s Burj Al Arab. After the past two years, almost nothing would surprise players in this turbulent industry.

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