The dream is eternal and knows no limits, and the luxury industry is its most fervent ambassador. However, the sector can only hope to grow exponentially by conquering hitherto underestimated territories with their roaring middle classes. Faced with a slowdown in its traditional markets, the luxury sector is more than ever infatuated with India and South-East Asia.
After concentrating its efforts on China, the end point of the Silk Road as traced by the famous 13th-century explorer Marco Polo, the luxury goods industry now sees South-East Asia – the sea leg – and India – the land leg – as its next growth drivers.
But in these lands, foreign to Western luxury and particularly proud of their ancestral roots, setting up a network of boutiques is not the same as conquering territory. The announcement of Sephora’s forthcoming departure from the South Korean market – a market with a saturated beauty offering and served by local brands with strong roots in the daily lives of its inhabitants – may serve as a warning.
However, the luxury goods industry seems to have learned its lesson from Covid, proposing a new cartography of desire, less dependent on the Chinese market alone, without stopping its development there.
Having reviewed the major recent developments in the luxury market and its organizational, narrative and commercial tactics, we now come to the end of our journey into luxury territory: its future El Dorados. New lands where mastery of multicultural subtleties will be key to the success of luxury’s geographic expansion.
Influence and soft power
Faced with the slowdown in the American and Chinese markets, players are setting out to conquer under-exploited territories, particularly in Southeast Asia (Thailand, Vietnam, the Philippines, Cambodia…), relying on the soft power of their K-pop ambassadors, who are acclaimed throughout the region. BlackPink became the first group to have all its members become ambassadors for luxury brands, paving the way for New Jeans and Aespa. Entertainment is the gateway to and prerequisite for any internationalization strategy, and is thus an integral part of the imagination of its populations, whether in concerts, TV series or spectacular fashion shows. Recent events have confirmed the increasingly close link between fashion and entertainment.
Laure de Carayon, consultant specializing in the Indian market and founder of Asia Loopers and China Connect, notes “the ever-growing importance of Asian ambassador-influencers who, after the Chinese, are now Korean, Thai and Indian, to the point where they will be ever more numerous, whether on the front row or virtually”. In addition to its compatriot Lisa from the South Korean group BlackPink, Thailand has emerged as the other leading destination for Chinese populations as their post-Covid borders reopen.
Luxury has also set out to conquer the snow-capped peaks and hotels of the most glamorous seaside resorts, as well as America and deepest China. Numerous boutique openings took place in the new leading cities, notably among the “Flying Over States” in the USA, while Hainan, Shenzhen and Chengdu were more favored than ever by Western luxury.
As Marie Duval, specialist in the Indian and Chinese markets and director of strategic brand planning firm SEMOPASS, points out, “although China‘s growth prospects in the luxury sector have slowed to 4-6%, they remain higher than those expected in Europe and the USA. So much so that the Indian luxury market is expected to grow by 10% over the next five years.”
Maharajahs’ dreams
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Featured Photo: Montage © Dior, Jaipoor Palace; Halong Bay, Thailand, Unsplash+; Flagship Hermès Azabudai Hills, Tokyo; planisphere, Unsplash; Gucci campaign with Davika Hoorne; Mumbai skyline, India, Unsplash.
