Raise your hand the ones who have the money

We've all heard about the economic crisis, the European Union's great recession and the debts of countries like Grece and Spain getting out of charts. The big luxury brands that feed the fashion world got to worry too, specially the ones that where born in these countries. ¿Why? Simple, their usual client's adquisitive power was not the same and its of popular knowledge that high end fashion companies depend on it. But there was not less money in the world, someone looses money then someone somewhere else must have got it. The crisis, although it is true, can also be seen as a re-distribution of money and goods. Money changed hands, to the ones that the luxury industry now needs to hold. 

In order to respond effectively, luxury brands need to invest large quantities in infrastructure, direct serious research in the new markets, and start campaining like they never did before in emerging economies without risking the status of the brand. For the political and economic models, China and India are the new rich, and they are going to be so for a while, and you can imagine the market size won't be an issue. While Latinamerican countries continue to grow, the United States is boucing back from a tough time. This doesn't mean companies should quit on the troubbled countries just try harder where true competition lays.  

It is very important for fashion companies to play risk seriously and learn to adapt their market segmentation constantly. For example, LVMH has stated that their corporate strategy is directed by the chinese market, they know where their money is, and where it should be all the time. The key of succes is to enter this countries with outstanding consumer service and sale experience. Chinese people have also started to travel a lot and be a part of the lifestyle they want, so brands need to focus on China the mainland without forgetting the chinese segment that travels a lot.  Chinese people have worked non stop to change the economy in their favour, and today working hard really pays off, specially if it comes in shape of a LV handbag.

Keep the Key,

The Good Dress by Laura