This blog post is in reply to my classmate Reico Lee’s blog post: China Lacks Homemade Luxury

Reico did an excellent job in showing that luxury brands are facing a certain decline in the market as Chinese luxury brands try to reposition themselves as equals of European luxury brands. It is a matter of time before Asian luxury brands start to seep into the market and is desired by many.

This is extremely problematic for the companies in Europe, or even Europe in general as luxury goods are historically unaffected by the cost advantage brought on by Asia, due to its high margin and willingness of the wealthy to purchase luxury goods at very high prices.

The luxury industry has been one of the areas where Europe faces little to no competition, and evidently, emerging economies such as China is proving to be a more important market as purchasing power drops in European countries.

As luxury brands of Asia emerge, European luxury brands will face stiffer competition, reduced customer based and cost disadvantage.

Before Asian brands start to take hold of the market however, the ball is in the European companies to find innovative ways to attract the Asian market and differentiating their product as the ‘most premium’ product, something that is way out of the league of the Asian luxury goods.

Such strategy must be swift, precise and lasting.

However, do you think that European luxury brands are doing all they can and should to protect their future market viability?