What's a brand like Louis Vuitton doing in a place like Ulaanbaatar? Read more to find out...
If, like me, the first time you heard about places like Ulaanbaatar you were watching Ewan McGregor's 'Long Way Round', then it might surprise you to know that global fashion brand, Louis Vuitton, recently opened their 440th store in Mongolia's capital.
According to a recent article in The Times, the store looks remarkably like their flagship store on the Champs Elysees in Paris. But, when the average monthly income is the equivalent of £130, what are they doing there?
Yves Carcelle, Louis Vuitton's CEO apparently doesn't do market research, but they did spot a high number of Mongolians in their Chinese stores. When they first visited Mongolia four years ago, the country's primary export was cashmere and there were hardly any cars on the roads. But, even then, there were sufficient wealthy Mongolians to justify opening a store.
And the decision paid off - last October the Mongolian Government struck a deal with Western mining companies to jointly exploit a mine with some of the largest gold and copper reserves ever discovered. Mongolia will own 34% of the mine and that deal saw the country's GDP rise by 30% last year.
Interestingly, where Louis Vuitton lead, other brands often follow. Hugo Boss, Armani and Burberry all apparently have stores planned for Ulaanbaatar in 2010. So where are Louis Vuitton heading next? It seems Beirut and the Dominican Republic may be on the cards - so watch this space.
All too often we just watch our own market and miss the bigger picture. In property investment, we were taught to look for out of town developments, such as new Tesco stores, or McDonald's drive throughs to identify purchasing opportunities. The same can be said of global business trends. Have Louis Vuitton cottoned on to something you could benefit from in your business??
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