Business
December 03, 2004
Largest luxury goods maker optimistic about Chinese mainland
The world's largest luxury goods maker, LVMH Moet Hennessy Louis Vuitton, plans to open 13 stores in the Chinese mainland by the end of this year, according to the company head Bernard Arnault.
In a recent interview with Xinhua, Bernard Arnault said his company has ambitious expansion plans to take advantage of the market growth in the Chinese mainland.
"Chinese mainland is the future and we see the energy," he said, adding his company already has made profits in the mainland since 1992.
Satisfied with the past, Arnault said the company wants to invest more in China on the long term.
"Chinese mainland and the city of Hong Kong are one of the most important players which will shape the new world," he said.
He was optimistic despite the fact that the mainland market only accounts for a minor proportion of its overall business, and the current purchasing power of mainland consumers incomparable to that of European or US consumers.
"In one generation, the mainland will be as big as the U.S.," he acknowledged.
"We want to have shops in main cities, and we should really follow the market and the trend," he said. However, he noted that the group will make progress only on schedule and will not be rush.
Speaking about the thriving counterfeiting business in the mainland and elsewhere, he said fake products do not only exist in one country or one region. "It's a worldwide problem since fake products are sold everywhere, every country, even in the developed world, just like drug trafficking."
He explained that fake products were not only of those bags, clothes, wallets, but even wines in the bar. Arnault said counterfeiting was costing the industry billions of dollars every year and had a turnover equivalent to 10 percent of all world trade. Last year, they spent 15 million Euro (19 million US dollars ) on the fight against fake wines, and much more for the whole group, all products.
However, he said, counterfeiting does not affect profitability as consumers are different. "We are selling for qualities instead of prices," he said, " but it is not good for the brand's image."
According to him, the mainland authorities are quite supportive in the fight against counterfeit, but in such a large market, it is a hard job.
Moreover, he noted counterfeiting is a global issue and needs cross industry cooperation and, to some extends, it is impossible to thoroughly wipe off the fake products from the market.
Source: Xinhua
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