ASIAN INVASION

Its no secret that China is quickly becoming the luxury capital of the world. As mentioned in previous posts, most high-end design houses have openly moved production further east. But most brands aren’t so straightforward. To please customers looking for the “Made in Italy” label, several luxury companies now have their goods made in Italy by illegal Chinese laborers. Today, the Tuscan town of Prato, just outside of Florence and long the center for leather-goods production for brands like Gucci and Prada, has the second-largest population of Chinese in Europe, after Paris. More than half of the 4,200 factories in Prato are owned by Chinese entrepreneurs, some of whom pay their Chinese workers as little as two Euros ($3) an hour.

Now that Italian labor costs have sky rocketed, and the Y generation seems less than enthusiastic to pick up century-old artisan skills, more and more companies are making the switch. But the big question still remains-- Do we really care where our product is made?

A lot of what our course is about is where luxury is going. Yes, it is possible to create the same quality garment, footwear, or leather bag in China. And some might even say the products come out better. The Japanese and Chinese have always been the most picky luxury consumers. Louis Vuitton even claims to have switched primarily to machine-made goods due to the high return carried out in the Far East. To these customers, a mistake common to hand-made goods is unexceptable, thus machine is preferred.

L2 2010-NYU-Stern

Did you know that Chanel Hawaii is the largest grossing Chanel? That Ferragamo is opening 10 stores this year alone in China? That, most suprisingly, Hermes is launching a new brand, Shang Xia, opening September 2010?

Here are a couple examples of luxury companies catering to the far eastern client.

Chanel's 2010 Shanghai Collection

Xue Song For Salvatore Ferragamo

Louis Vuitton SS 2011

To find out more about vastly growing asian luxury industry, I recommend reading "The Cult of the Luxury Brand- Inside Asia's Love Affair with Luxury".