India added a local sourcing clause to FDI, making it difficult for luxury brands to enter the local market. China overtook the United States as the world’s biggest consumer nation of luxury goods. Luxury goods brands led a mass exodus from Argentinian retail.
European luxury brands were snapped up by wealthy investors in Asia and the Middle East. Fast running out of brands to acquire, luxury conglomerates intensified acquisition of suppliers.
Luxury fashion houses made a serious foray into fine jewellery and timepiece categories. Luxury conglomerates went to court for counterfeit, copyright and everything in between. And continued to look for heritage brands of the past to bring them growth in the future.
In December 2012 Bain & Co. reported that Chinese consumers have overtakenU.S. shoppers to become the world’s biggest buyers of luxury goods. The Chinese now account for 25% of global sales through purchases at home and overseas according to the consultancy firm, as U.S. consumers account for one-fifth of the world’s luxury sales.
China’s domestic luxury sales, estimated to be worth 106 billion yuan ($17 billion) in 2011, are expected to grow 7% this year – a marked slowdown from 30% growth in 2011. In 2012 it also became clear that more and more Mainland Chinese tourists are shopping in cities like London, New York and Paris, where they can save as much as 40% on luxury goods because of the weaker euro and on differences in tax or duties.
The Heritage Revival
The current economic slowdown, combined with densely crowded prestige markets, has led many entrepreneurs to consider reanimating an old brand rather than creating a new one," explains James Lawson. “By reviving an old brand, entrepreneurs will benefit from its existing brand recognition and equity, usually defined as a combination of positive visual, verbal and emotional associations.”
A classic example is Faberge whose brand was long used for fragrances and cosmetics and only recently saw the original production of jewelled eggs restored. Similarly, LVMH acquired Moynat, a luxury leather luggage house that was founded 150 years ago but whose brand had been dormant for the past three decades. This year Tod’s resuscitated Maison Schiapparelli, a fashion brand that had been dormant since 1954.
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