Louis Vuitton

Executive summary

Louis Vuitton, the Paris based brand wanted to sustain its growth rate and so it planned to enter into the new markets, beyond the traditional orbit of Japan, Western Europe and the United states. They wanted to tap the growing markets of China, India and Central Europe. They found that in the rising affluence of Asian market there is a natural growth platform. It is then the company started working in 1999, towards a formal entry into India. Though india was a familiar market for the company as for a historical reason during 19th century Maharajas in India flooded the small factory of Louis Vuitton in Paris with requisitions for custom-made leather interiors for their Rolls-Royces and leather bags for their travel during annual vacations. But today India is unlike the markets of the United States, Europe and the Far East in which Louis Vuitton was doing business. It is a country in which 87% of the population lived on an income of less than $2.50 a day would not be a particularly hospitable environment even to a fashion products company. Whereas Louis Vuitton a luxury product company precisely was targeting customers who have a million dollar income. But the company observed that rich Indians are flying abroad for shopping as these luxury products were not available in India so the company decided to come up with stores in major cities of india, an acquire a customer base of 1 million by 2010. But moving on company faced certain issues such as they were not able to make a direct local sale as they did not set up a local physical presence, the customs duties on imports of luxury products were high in India ranging between 30 per cent and 70 per cent, they had rendered domestic purchases of luxury products more expensive than offshore purchases. In 2001 federal government lifted the ban on import of leather product and so the first hurdle for Louis Vuitton was cleared and started focussing on their potential location