The influx of European brands into this landlocked Central Asian country is a bold venture.
If you live in Ulaan Baator, you must have seen the gigantic Sean Connery Louis Vuitton ad plastered across the wall of the Shangri-La / Central Tower building facing Sukhbaatar square. The makeshift banner-wall is now down, and the LV shop facade has emerged ready for its grand opening soon. Yves Carcelle, chief executive of LV, had this to say:
“Sometimes in our industry there is a tendency to follow your ego and sometimes open stores where you don’t have the market, or stores too big for your potential -- we never do that,” said Carcelle. “When we open a big store, we know that there is a market, we know the financials. So we never have to close a store for economic reasons.”
A bold statement to make. I have to admit at the same time, I have little knowledge of the luxury goods market in Mongolia. I do know that those who can afford and do purchase branded items are also those who can afford to fly to Europe or Beijing to purchase them. It is just as much about the purchasing experience as it is about the brand.
Interesting fact about LV is that it is one of the most pirated brands in the world, which is why LV only markets its products through its brand stores and not dealers.
Do Mongolian herders dream of LV bags?
In other news, Salvatore Ferragamo is also looking into opening a branch in Mongolia.
2010 will also see the opening of other luxury brand stores, including Hugo Boss, Ermenegildo Zegna, Emporio Armani and Versace. Gucci has already started advertising its new scent on TV, so perhaps they're not too far in line.
While these brands have very different target consumers in their more developed markets, here in Mongolia, they may have to compete for the same 300 or so customers who can afford their products and are brand-conscious enough to purchase them.
Bilguun Munkhjargal blogs at asiangypsy.net