Cécile LE GOFF Charlotte VESIN

The Company

Louis Vuitton

• Early Days (1854-1892)– 1854 - Louis Vuitton opens first store in Paris– 1892 - Vuitton dies; the Vuitton company begins selling

handbags.

• Golden Age of Louis Vuitton (1893-1936) – 1893 - Georges (Louis’s son) begins his campaign to make the

company into a worldwide corporation.

• Modern Age of Louis Vuitton (1937-1996)– 1978 - Vuitton opens its first stores in Japan

Followed by many others international stores

– 1987 - Moët et Chandon and Hennessy, merges with Louis Vuitton. Creating LVMH

– 1989 – LVMH become Bernard Arnault property

– 1992 - The first store in China opened at the Palace Hotel in Beijing.

• Millennium Age of Louis Vuitton (1997-present)– 1997 - hires designer Marc Jacobs to be the label's artistic director

– Today –The brand is said to be worth $ 19.781 billion

Louis Vuitton Facts and Figures

LVMH revenue : 17 billion $

Louis Vuitton revenue: 2,9 billion $

LVMH value: 44.1 billion $

LV value: 19.781 billion $

LVMH Statement

• “LVMH must continue to be synonymous with both elegance and creativity. Our products, and the cultural values they embody, blend tradition and innovation, and kindle dream and fantasy.”

• Louis Vuitton Strategy:• Sell in their own shop only• No sales• To set up in a new country each

year

Louis Vuitton in China

• Chinese are the first LV customer

• LV has more than 30 shops in

China

• Chinese favorite accessory brand

• Chinese are the second biggest

luxury consumer

Brand ranking - China

BMW

Louis

Vuitton

Mercedes-Benz

Rolex

Giorgio Armani

Ferrari

Rolls-Royce

Bentley

Cartier

Vacheron Constantin

Competitive environment

Who are the customers?

– Women & Men

– From 25 to 65 years old

– Earning about $5,500 or

above per month

Customers with high revenues

Customers that save

to purchase

Suppliers

• Leather producer, Fabric

producer…

• Key relationship with each of them

• Proximity

• Reliable supplier

Louis

Vuitton

Yves

Saint Laurent

Gucci

Balenciaga

Chanel

Hermes

Christian

Dior

Giorgio

Armani

Fendi

Givenchy

VersaceMarc

Jacobs

ChloeKenzo

Dolce &

Gabanna

The Competition

The Key Success Factors

• High end Product

• Excellence

• The Know how

• Innovation

• The notoriety & the image

Key success factors in China

• Understand the Chinese market:– understanding the “why” that drives

luxury purchases

• Enhance the brand image– Reputation

• Sell the excellence of the product and the culture behind it– “Chinese consumers are inquisitive.

They want to know why somethingis a good product.”

• Train the employees

Competitive advantage with Chinese people

• Collections which does not often change

= profitable Purchase

• LV is their favorite brand � fashion and accessories

• Rich Asiatic : – Big reputation and

– wear visible outside brands

• Label France : excellent reputation

Pourquoi LV attire les chinois

• Collections qui ne change pas souvent = le sac ne va pas vite être démodé = Achat rentable

• Louis Vuitton est leur marque préférée (mode et accessoires)

• les riches Asiatique souhaitent surtout acheter les produits de luxe possédant une grande réputation et portant des marques extérieures visibles

• Le label France à une excellente réputation et colle parfaitement aux idéaux de la cible chinoise en matière de luxe : le romantisme, le savoir faire et la longue histoire des marques.

Louis Vuitton vs Counterfeit

Luxury market in China

• Economy of 10 billion $

• 40% of Chinese consumers buy luxury products in their own country

• Target : 20 to 40 y.o – essentially men

• Why ? Reputation and visibility

Luxury market in China

• In 2009, 300 luxury shops opened in the world : 15% were in China

• 78% will maintain or increase the consumption of luxury goods in the next 12 months

• 84%bought for themselves

• 28%-38% of luxury products are aim to be be presents in commercial relationship

Luxury market in China

• Reason of the growth :

– Changes in the values of Chinese : more

individualist

– Attraction of occidental values

– Growth of pleasure and elegance consumption

– Luxury = Face and money wealth

China attractswell-knownluxury brands

Chanel Collection “Paris – Shanghai”

Dior

Prada

HermèsLaunch of the brand “Shang Xia”

Commercial advertisement produced by Yang Fudong

International Fashion show in Shanghai soon

Counterfeit

• Increase of pirated goods in world trade : 1.85% in 2000 to 1.95% in 2007

� US$250 billion worldwide

• When calculating counterfeit products, current estimates place the global

losses at $400 Billion.

ImitationPatent

infringement

Globalization Money loss

Fraud

Counterfeit in China

• very well organized network

• 2 types of counterfeit product

• 3 types of counterfeit production

• Fake: fully integrated in Chinese lifestyle

Counterfeit in China

– 80% of world wide counterfeit

– 8% of the GDP

– 10% of annual industrial

production

– 16 billion $ of revenues

Louis Vuitton vs counterfeit

• Policy of zero tolerance

• Policy of information and raising

awareness of the general public

• About sixty persons dedicate

themselves completely to the fight

against the counterfeit

• Large-scale actions in China, Korea,

Thailand and in Italy

Louis Vuitton vs counterfeit

• Agreement with Rakuten

– Contribute in a significant wayto the construction of an evenmore safe environment for consumer

• Ebay against Louis Vuitton

• Louis Vuitton spent last year 15 million euro in the world against the counterfeit

Louis Vuitton vs counterfeit

Shanghai – Mars, 2009

• Three defendants :

– Wu Beiwen, shareholder of the Shanghai Zhongwen Trade Co.,

Ltd,

– her father and husband, who participated in the business.

• The court said LV claimed the defendants violated the

company's trademark rights by selling fake LV products.

• LV wants the court to

– stop the defendants selling products under its registered

trademark

– Claims financial compensation of one million yuan (about

146,200 U.S. dollars).

Ideas to lower counterfeit

• Chinese advertising campaign

about the effects and damages of

counterfeiting

• Applying a “terror policy”

• Creating more capsule collection

with limited edition products

Thank You