The emerging markets of the BRIC countries have become a hot bed of growth for the luxury sector. Consumers from Brazil, Russia, India and China currently make up around 20 percent of the world’s luxury market and it’s estimated that by 2015 this figure will rise to over 35 percent. With their burgeoning economies and the subsequent increase in affluent individuals, the appetite for luxury has grown. Even though the majority of demand is for well-known western labels, the surge in popularity for luxury has prompted emerging markets to produce their own homegrown luxury brands as well.
Why produce homegrown luxury?
- The BRIC nations are suited to being luxury producers as they have the natural resources, unique cultural heritage and a tradition of craftsmanship.
- A desire to create a brand that can represent their country, celebrate its national identity and challenge the global western brands.
- Some locals would prefer to buy a brand that reflects more of a national flavour in its design and origin.
- Homegrown luxury is often better value than expensive imported brands.
Successful emerging market brands.
The challenge for these homegrown luxury brands is how to enter the markets of established brands and gain success on the global stage. A few brands from emerging markets have so far achieved this and shown that there is a place for them among their western counterparts. Here are three examples…
Brazil’s first global luxury brand was founded in 1989 by Oskar Metsavaht, initially offering winter sportswear and later expanding into ‘lifestyle’ fashion. The first store opened in Buzios, Rio de Janeiro, and since then Osklen has gone on to have 63 stores in Brazil and 10 more abroad ranging from New York to Milan, as well as exporting to over 30 countries.
Shanghai Tang (China)
Founded in 1994 by David Tang, this luxury lifestyle and clothing brand is inspired by traditional Chinese culture and given a modern twist. Its first store opened in Hong Kong and aided by the backing of the Richemont group which took full control of the company a few years later this brand has now spread to 20 cities worldwide.
Here are two other Chinese brands with a foothold in Europe:
This luxury leatherware brand was started off as a hobby by Dilip Kapur in 1978. Focusing on innovation, individuality and ecological values, the brand spread quickly abroad into the US, UK and Australia within 5 years. By 2000, over 90 percent of their products were being exported and the brand now has presence in more than 20 countries worldwide.
These are some more brands that have spread beyond India:
A benchmark for the future..
Luxury brands such as these serve as an example to others from emerging markets looking to spread abroad. With a significant proportion of the world’s luxury consumers it makes sense that the BRIC countries build their own brands to compete with the traditional ones. As the luxury sector is set to grow even more in emerging markets over the next decade and beyond, it is clear that the future of luxury lies with them and in the spread of their homegrown brands. The western consumer now looks for luxury that is bespoke, artisan and unique – qualities that the emerging markets, with their great heritage of craft, can offer.