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Buy or Hire, latest trend to still enjoy a bit of luxury |
Japanese consumers are renowned for their appetite for luxury brands, hence Georgio Armani and other high-end labels opened their largest outlets in the glitzy Ginza district in Tokyo.
Consumers though are no longer willing to contribute a month's salary on a Gucci or Louis Vuitton bags, even though they still desire to sport them. For some though, the solution appears to be to rent coveted luxury brand items for several thousand yen a week. With the economy slowing down, Japanese women have had to end an obsession of owning new luxury and branded products. Though their vanity and desire for good things will continue, businesses providing new alternatives will prosper. Luxury brand items are taking a bigger hit in Japan than in other parts of the world because the industry here has long been supported by middle-class working women, as opposed to the super rich. But as sales slide, people with entrepreneurial spirit see a business opportunity: brand rental — a new concept in Japan. Yet the concept of hiring clothes or bags has been around for a while within the US and parts of Europe. It was thanks to the film "Sex and the City" and the use of high end fashion items in the film that has encouraged Japanese women to consider hiring branded products. Not only it seems that possessing top-brand bags and accessories is trendy, but actually hiring them instead is becoming a new fashion trend. Once people realise renting is much more affordable, they will probably continue the practice even if in the future they acquire the funds to buy. New products depreciate in value to a third or quarter after being on the market for a month. Famous brands, including Chanel and Gucci, however, hope the rental option does not become too popular and further dampen their sales. As a sign of the times, Louis Vuitton Japan Co. scrapped plans to build one of its largest outlets in the world in Ginza, apparently due to the recession. Japan's luxury brand market has been growing for years but is expected to fall this year for the first time in a long time. The benefits of a strong yen are expected to fail to attract consumers this year, who will tighten their spending on concerns over job security. Business analysts expect that sales of handbags, accessories and suits will probably be hit hard. This is due to working women, a segment making the largest contribution to the industry's growth, are expected to be hesitant to spend. It is expected that the impact will not be as harsh in Japan as it will be in the US or Europe. This is due to Japan having suffered a long-term recession in the early 1990's. During this time, the luxury market did expand. So not all is lost! Leading brands will continue to promote and advertise, and this will indeed give added strength in boosting sales within Japan. |
