The founding of Louis Vuitton dates back to 1837. France was experiencing economic boom, which was luring tens of thousands of people to the capital city of Paris. One of them was a 16-year-old Louis Vuitton. He walked 292 miles from Anchay to Paris to find employment as a trunk maker's apprentice. At the same time, the travel sector was flourishing as a result of the development of steam-powered trains and ships.
When he established his first store, Vuitton made the most of this (1854). In 1858, he presented his redesigned trunk design. Unlike its predecessors in the dome shape, it was rectangular, making it simple to stack. The cotton canvas material was convenient for travel because it was portable, strong, and waterproof. Many people credit this design with introducing the contemporary suitcase. In 1896, in memory of his deceased father, Georges Vuitton, who died in 1892, he designed the enduring Louis Vuitton monogram, a flowery pattern with an interlocking L and V. Owning a Louis Vuitton has a long history of being seen as a prestige symbol, from French aristocracy in the 1800s to celebrities in modern times. The renowned monogram is now present on everything, including toilets, handbags, apparel, shoes, and jewelry. Amazingly, the brand is worth $47 billion. The high cost of production is one factor contributing to Louis Vuitton goods being so pricey. For instance, the high-end brand avoids outsourcing manufacturing to less expensive countries and makes its handbags in France.
The company's creations are crafted by skilled artisans in Europe and the US utilizing pricey materials. Despite technological advancements, the corporation claims that the sewing machine is the most sophisticated piece of equipment that touches its goods. But if there are too many products on the market, even the best products might lose their value. Louis Vuitton halts production of a product after it achieves its sales goal for this reason. Brands frequently hold sales or sell the excess product through outlet stores that provide discounts in order to get rid of the excess. Louis Vuitton has been able to prevent both of those situations by managing its supply. In fact, it makes the bold claim that it is the only brand in the world without ever having a sale.
Moreover, while doing so aids the fashion house in maintaining its worth, it also makes it a prime target for fakes. The most imitated luxury brand in the world is Louis Vuitton. In 2018, its goods accounted for more than half of the counterfeit luxury goods on the market. The iconic look of the brand has essentially remained the same for the past 150 years, according to experts, enabling those operating on the black market time to produce nearly flawless imitations. Since luxury brand counterfeiting has become so pervasive, e-commerce behemoths like Amazon and Alibaba have begun to take action. As an illustration, Alibaba recovered counterfeit goods worth $536 million in 2018.
Despite having modest beginnings in France, Louis Vuitton has evolved marketing methods to win over a big following abroad. One of the most important markets for Louis Vuitton is China, where these tactics have proved very successful. Since 1992, when it became the first international luxury brand to establish a physical location in the nation, the company has had its eye on this market. At the time, China was still considered to have a developing economy. Even the head of LVMH, the parent company of Louis Vuitton, Bernard Arnault, claimed that at the time of the debut, there were more bicycles than cars.
The rise of China's middle class and high net worth individuals coincides with the country's transformation into an economic superpower. As a result, the nation has become a lucrative market for luxury companies. In 2018, Chinese customers domestically and internationally spent $115 billion on luxury goods. With each luxury-consuming household paying an average of about $12,000 (11,525) annually, that represents one-third of the total worldwide expenditure. Chinese consumers will make up 40% of all global expenditure by 2025. Due to the increased demand, prices are rising. Luxury items from labels like Louis Vuitton cost 21%i more in China than they do globally. This implies that the typical Chinese consumer spends an additional $420 for a $2,000 handbag.
That totals out. So much so that some affluent consumers have begun paying agents to buy premium products on their behalf abroad. In France and Italy, luxury items cost 22% less than the global average. The same translates to a Chinese customer paying $860 less in France than they would have at home for a $2,000 handbag. The company, which has been around for more than 150 years, is now concentrated on discovering strategies to appeal to younger, wealthier clientele.