In Yutong Xiong’s blog, he discuss the main reason of decreasing sale of LVMH is because expansion of store. My discussion on LVMH’ control-distribution strategy, which present in my blog, can also explain the fact of sale decreasing of LVMH. When the products only target on few cutomers(specially rich people), buyers who gain the bag will feel the product is valuable and obtain recognition and admiration.
However, Xiong did not investigate why Louis Vuitton experienced quick expansion in China. Indeed Chinese economy boost and the mainland market grow extremely fast. Although the gap between rich and poor has widened, more and more Chinese people become wealthy and upper-class. Undoubtedly the demand for luxury increase, and thus LVMH open more and more store in order to capture the opportunity. However blind expansion in order to maximize the profit lead to the lack of maintaining the image. It really cause the decline of the sales.
link:
https://blogs.ubc.ca/xyutong/2013/11/13/louis-vuitton-loses-value/
photo via:
http://marketingtochina.com/wp-content/uploads/2012/05/louis-vuitton-shanghai.jpg