During a special interview, Michel Phan, Associate Professor of Luxury Marketing at EMLYON Business School’s Asian Campus in Shanghai, talks about his expertise on the luxury industry in Asia.
You need to be passionate about what you do and you need to be very thorough in your process and try to constantly achieve excellence. Everything you do needs to be excellent and perfect. Excellent in the process, in the design, in the manufacturing techniques, in the distribution, in your communication skills etc…Excellence is the most common trait between all luxury brands in this industry.
You first have to distinguish different parts of Asia. India has a big market potential, followed by China, Japan and other countries in Asia. Depending on which country you are talking about, the potential and evolution in the luxury industry is very different.
Japan is still one of the main luxury markets in Asia. However it has been stagnant for many years now and the evolution of the market has slowed down a lot. One of the reasons is that Japanese people are realising that luxury consumer goods is not the only way of enjoying life.
India is still an emerging market in this sector despite the huge population of the country. It’s a market that is very slow to develop because of many infrastructure problems like the lack of luxury malls and the fact that they have no space for luxury flagship stores. To find luxury goods, people go to regular malls or hotel lobbies, which both have limited growth potential.
China has been growing very fast for the past few years and the infrastructure is now greatly developing. Many stores have opened in the past 5 or 6 years which has influenced market increase. Today China remains the first growing market in Asia.
There are still many businesses that have a lot of growing potential in the luxury industry in Asia. The sector of business services for people and companies is a good example. The hospitality services and private education for children are developing themselves. If you take private education in China: Parents are becoming richer and want a better education for their children.
In terms of untapped country markets, Brazil, South Africa, India (if they can invest in infrastructures) and China, thanks to a higher disposable income, have a high potential. Other countries in South East Asia are also very interesting to look at such as Vietnam, Thailand, Burma and South Korea (proportionally to the size of the country, it is one of the fastest growing countries in terms of luxury goods).