Tastes of luxury in China are changing, Keeping Up LVMH

  According to an article in the Financial Times several experts believe it's LVMH PINK: LVMUY, PA: MC Q-1 slows growth numbers are because the company underestimated the speed at which the Chinese taste away logo-heavy designs to sobriety.

If the luxury retailer recently reported its Q-1 growth of 3%, fueled the small number of industry concerns that the slowdown in China can meet more difficult than expected, to luxury. But as the results of other luxury brands is entered, it became clear that LVMH achieved worse than others.

The article cites several reasons for the slow growth in China LVMH, which relate to the changing tastes of Chinese consumers.

The status of Louis Vuitton as "mega-brand" may be that it is bad move to another niche tastes labels.

According to the article: "The risk of mega-brands, analysts said HSBC is" ubiquity - the idea that the consumer can see the same products in the world to be "too often" perceive a brand begins. In our opinion, the main victims of this topic Louis Vuitton, Gucci and Burberry as customers in developed countries and even major Chinese cities are less likely Products "logo to buy.

Complication was the fact that LVMH has not to this trend very quickly to compensate introduced in contrast to rival PPR, the successful Bottega Veneta in the Chinese market Gucci PINK replied: slow growth GUCG.

An analyst at Exane BNP Paribas, PA: BNP, PINK: BNPQY, compares the movement of the multi-layer of Mercedes, who pursued introduced around his car mainstream e-class strategy high-end and low-end models.

The question is "informed consumers will prefer to buy high-end versions of the mega-brands such as LV in the future, or will they buy instead of niche brands" pure "premium such as Hermes," he asks.

Niche brands are strong, including increased Goyard, Bottega Veneta Celine PPR and LVMH.

Mr. Arnault told shareholders that Celine was not joking on the "radar" 5 years ago, but now that her daughter Delphine, often wore the brand, despite their alleged affiliation to Christian Dior LVMH, which is an administrator.

The problem is that LVMH's Celine previously held about Louis Vuitton, Bottega Veneta, unlike PPR, which has grown rapidly for a number of years, as an alternative high-end brand Gucci groom.

LVMH responded by limiting the number of branches and the introduction of free logo designs.

In January, commissioned Louis Vuitton Fan Bingbing brand ambassador for a new set of leather "China-exclusive" No Logo handbags that radically logo of the unique style and fabric of the society are to promote and reduced the number of new openings to obtain exclusivity.

Under Article FT, the company is confident that the new strategy will pay off.

"At the risk of shocking the whole world, [a growth rate of sales of Louis Vuitton is not a problem," said Bernard Arnault, LVMH CEO at the general meeting of shareholders, stating that the slow growth was part of the "deliberate strategy" of the company exclusively to more.