Chinese Consumer Behaviour Towards Louis Vuitton

Introduction

Luis Vuitton Malletier (LV) is a French fashion brand, founded in 1854 by Luis Vuitton. The products of LV range from handbags to luxury trunks. All the products are of high quality, and can be seen as a luxury product. LV is currently one of the leading fashion houses in the world, this shows in the fact that they are named as the world’s most valuable luxury brand for the seventh consecutive year. LV products are sold all over the world in special LV stores. One of the biggest target groups of LV is the upper class Chinese customers. The luxury sales in China currently represent 10% of the global market and CLSA, a leading Asian investment bank, estimates that this 10% will increase up to 44% of the global demand within the next 8 years (J. Fung, C. MacAusland, G. Chang Mazza 2012).

Problem definition

Over the past few years, an increasing amount of Chinese luxury consumers choose to do their luxury shopping overseas. Recent studies show that over 50% of the Chinese luxury purchases were done abroad, specially Europe is very popular for the Chinese consumers(J. Fung, et. al, 2012). This phenomenon results in tremendously decreasing sales in Chinese LV retail stores. The aim of this report is to analyse the attitude/perception of the Chinese luxury consumer towards LV, how to possibly change this attitude/perception and what marketing strategies can be implemented in order for LV to get his Chinese sales up and running again.

Attitude/Perception of the Chinese customer

Chinese consumers see LV as a high quality, and high status company, its products represent the same.

Regarding the LV stores in China, the Chinese consumers have some remarks:

Prices are high

The prices of the Luis Vuitton product in China are too high due to tariffs and taxes. China’s import taxes on luxury products range from 20% to 50%. These high prices in China are also enforced by the additional local taxes like the 17% value-added tax. This results in a higher price in Shanghai, than in Paris. (J. Fung, et. al, 2012) The Chinese consumers do not want to pay 1400 Euros for the exact same dress, available for 900 Euro in Paris. So when the trip to Europe is combined with a lot of luxury shopping, the plane ticket and accommodation in Europe can be recovered.

European trends

Chinese consumers have the perception that the brand availability in for example Europe is a lot bigger, compared to the Chinese product selection. They believe that not only the product assortment will be wider abroad, but they also believe that latest trends are implemented quicker in for example, Paris. Which results in a newer, more up-to-date product assortment.

Status

Travelling