Louis Vuitton

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DICHOTOMY BETWEEN LOUIS VUITTON AND INDIA’S ECONOMY

Louis Vuitton has created a brand that stands for luxury. The company has worked hard on being the top luxury brand in the world. India is one of the fastest growing countries in the world. Its population is second only to China. Unfortunately, close to 90% of the country’s population lived on income less than $2.50 a day during the 1990s. In order to dichotomy to be mitigated, Louis Vuitton focused on the ultra-rich people in the country. These people have been Louis Vuitton customers for generations. Until the mid-1970s, India was compromised with 600 maharajahs ruling different provinces in British India. These royal families were accustomed to buying luxury goods in locations such as Paris. While the maharajahs have been dismantled, these people went on to become entrepreneurs and business leaders. Louis Vuitton wanted these people to create their customer base, along with Bollywood actors. 51% of the population in India is under 25, so there are young consumers who can be attracted to luxury brands. Luxury brands create the feeling of exclusivity. In a country with a high social structure it is important for the rapidly growing middle class to have symbols to show that they “have arrived” in the upper edges of society. Louis Vuitton serves as a perfect tool to display their newfound wealth. If the company focuses on gaining and retaining these new consumers, they will have a plentiful demand for their goods in India.

EXTERNAL FACTORS

The country’s government served as the biggest obstacle of selling luxury goods in India. High tariffs on imports and ban of direct foreign investment hindered the purchase of luxury goods. Customs duties on luxury goods ranged between 30-70%. This made luxury goods a lot less expensive abroad. Consumers were more willing to shop in other countries for their goods rather than spend the extra money on similar products in India. The government banned direct foreign...
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