Hey, big spender.
At first glance, Yukina Abo, 22, is one of many million reasons why Japan consumes 41% of the world's luxury goods, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. JETRO JETRO Japan External Trade Organization . Her impressive collection of luxury accessories includes Louis Vuitton The Louis Vuitton Company (more commonly known simply as Louis Vuitton) is a luxury French fashion and leather goods brand and company, headquartered in Paris, France. It is a division of the French holding company, LVMH Louis Vuitton Moët Hennessy S.A. , Hermes, Prada and Coach. Aspirational consumers in Japan like Abo have been willing to skimp skimp
v. skimped, skimp·ing, skimps
1. To deal with hastily, carelessly, or with poor material: concentrated on reelection, skimping other matters.
2. and save to buy a must-have item, even if it means getting into debt to do so.
Dominic Carter Dominic Carter is the Anchor of NY1's long-running news and commentary program focused on New York City politics, Inside City Hall. He has been a reporter and anchor for the network since its inception in 1992. , president of marketing research firm Carter Associates, says that in Japan's group-oriented culture, the pressure to own iconic i·con·ic
1. Of, relating to, or having the character of an icon.
2. Having a conventional formulaic style. Used of certain memorial statues and busts. brands has meant that for successful brands in Japan like Louis Vuitton. the luxury market has in effect been the mass market.
But this year, at the The Financial Times 'Business of Luxury' summit in Tokyo, one panel discussion focused on the question of why sales of many luxury goods are flat in Japan. One reason is that incomes have not risen very much for the past 15 years: relatively speaking, people are less wealthy.
"I'm not for a second suggesting that luxury is going to go into decline in Japan, but there's not money to burn any more, not in the mass-market," Carter says.
At the time of the summit, an expert on Asian consumers, Radha Chadha, wrote an article for the FT expressing the opinion that Japan has already passed through what he calls the 'Show off' and 'Fit in' stages of luxury culture. For Tokyoites. Chadha's 'Fit in' stage virtually equates with brands like Louis Vuitton: he reports that as many as 94% of Tokyo women in their twenties own a Vuitton piece. True or not, for Japanese women iconic brands like this one have achieved an astonishing a·ston·ish
tr.v. as·ton·ished, as·ton·ish·ing, as·ton·ish·es
To fill with sudden wonder or amazement. See Synonyms at surprise. degree of mass acceptance because they symbolize making it into the acceptable group of society.
"In Japan, if it's a bag which everybody loves, maybe 90% of your friends will have that same bag," comments Mukai Noiri. "Compared to western cultures, there's not so much of 'I want to be exclusive, I want to be the only one who has this bag,' " he says. Noiri knows about exclusivity. As marketing assistant manager at Desco Luxury, he handles high-end watch brands such as Arnold & Son, Graham London, Maurice Lacroix Maurice Lacroix is a brand of Swiss watches from the Canton of Jura.
They offer high quality watches in the middle range of high watchmaking.
They are notable for offering mid-price mechanical complication watches - The Réveil Globe , and Parmigiani: "Basically, our brands are doing well, but it's a tough time for any item in the luxury division in Japan. The market is saturated, with the main internationally established brands enjoying maybe 80% of the market," Noiri says.
Noiri knows about exclusivity. As marketing assistant manager at Desco Luxury, he handles high-end watch brands such as Arnold & Son, Graham London, Maurice Lacroix, and Parmigiani: "Basically, our brands are doing well, but it's a tough time for any item in the luxury division in Japan. The market is saturated, with the main internationally established brands enjoying maybe 80% of the market," Noiri says.
"Our watches start at [yen]1 million and go up to about [yen]90 million, so we basically target the wealthiest 5 to 10% of the population," he says. "Obviously, you want sales to be as high as possible, but I don't think, as a business, you need to have the whole consumer population going after your brand. One of our brands, Graham London, is actually based on eccentricity eccentricity, in astronomy: see orbit.
weird family, presented in grotesque domesticity. [TV: Terrace, I, 29]
travels with set of Encyclopaedia Britannica and looks to be different, as opposed to targeting that group mentality. This is becoming popular in a niche market A niche market also known as a target market is a focused, targetable portion (subset) of a market sector.
By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. ."
Quality and value
Quality is exceptionally important for success in Japan, especially for smaller brands that may lack the fame of large, established brands. While this sounds obvious, it can be a major stumbling block stum·bling block
An obstacle or impediment.
any obstacle that prevents something from taking place or progressing
Noun 1. because the Japanese idea of quality arises from a different mindset mind·set or mind-set
1. A fixed mental attitude or disposition that predetermines a person's responses to and interpretations of situations.
2. An inclination or a habit. , with a mania Mania
ancient Roman goddess of the dead. [Rom. Myth.: Zimmerman, 159]
See : Death for detail that can amaze even the most conscientious westerners.
But challenger brands are shaking up some segments of the luxury market in Japan by offering designer quality at competitive prices. Successful in Europe, H&M is a Swedish company about to launch in Japan with a fast-fashion concept that has the potential to shake up the market. "Companies like H&M and Zara have a business model designed to compete effectively with quality brands, very quickly bringing out affordable new designs that often look like something straight off the catwalk," observes Dominic Carter.
Due to economic conditions, and changing consumer tastes, over the past few years the concept of value-for-money has gained ground. Michael Fiorella, who owns strategic marketing firm Spark Productins in Tokyo and blogs on trends on the Japan Marketing News Web site, says that there is a slice of the market that is "realizing that well-crafted products that are delivered at a reasonable price might be analternative to products they've traditionally boutht"
As marketing advisor to the CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Coach Japan from1998 to 2005, Fiorella was involved in repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. the brand. In 2000, Coach had about 75 sales locations in Japan. Today, this figure has doubled.
"Coach started edging in on the lower end of the prices that Louis Vuitton and Gucci were offering" Fiorella says.
That can be presumed or taken for granted; reasonable as a supposition: presumable causes of the disaster. in response to that, these man-ufactures have released products that now reach down into the price range that Coach was reaching up into. Coach was a little too inexpensive, and has therefore added more expensive products."
Fiorella estimates that Coach has earned well over US$100 million from optimizing its product lineup to suit Japan, and developing Japan-centric marketing approaches. Moreover, he says that brands need to be very careful about the method of market entry and the channel strategies that they use. "You need the right distribution partners and you have to be in the right retail chains in the right cities."
Successful advertising and packaging from your home market may actually hurt your brand in Japan and Spark Productions developed localized communications initiatives for Coach which were well-received by Japanese consumers.
One area to watch will be high-end luxury brands as more Japanese seek brands that suit their own values and sense of style. Carter argues that the role of the endorser is especially important in Japan, "You've got to get into the right magazines, with the right people wearing your brand. It gets out in the media that way, and it builds up from there."
Another area to watch: how brands leverage the power of online recommendation, using the web and cell phones as a channel. The challenge will be to maintain a level of service while creating positive digital brand experiences.
But affordable quality seems to be the major new frontier New Frontier
President John F. Kennedy’s legislative program, encompassing such areas as civil rights, the economy, and foreign relations. [Am. Hist.: WB, K:212]
See : Aid, Governmental , and ideas of fashion for consumers like Yukina Abo and her friends will also continue to evolve.
"When we were at high school, having the right brands made us feel like we could present ourselves as adults, but for the people that we now consider fashionable, the look is more important than the logo."
Jon Hoel is a writer and consultant with an interest in cross-cultural marketing and communications.