When market size is not everything – The value of selling in Japan

It was not a such big surprise for me reading an interview relased by Hermes Chief Executive Officer , Patrick Thomas  published on japanese Yomiuri shimbun, where the selling activity  of the famous mason in Japan has been compared with the success of the same brand in China (boosted by smart relocation of french brand in chinese Shangxia JV), focusing out the value of “buying with awarness” typical of japanese customers for luxury brands. 

If one high level company like Hermes is investing on research of the quality, design, materials and everything it’ll be necessary  for the improvement of the products, surely it also will be able to understand the difference between the size matters of the market (like Japan if we compare it with China) and the deep criticism of customers dependent by taste and quality. Italians and Japanese could be considered a great exemple in terms of criticism and taste. Probably japanese people more focused on criticism and italians absolutely more on taste, but pretty similars where we talk about “consciousness of purchase luxury items”

Taking care of each needs, despite it’ll reach just a short target with selective production, represents one of most important values for luxury brands that first of all must focus their production on particular age brackets or customers with a certain level of purchasing power. Doing that they’ve got the point: be present among people that counts!

So although the Chinese market is certainly developing rapidly, it’s still very young and there are many unpredictable elements. It seems to be right in the middle of a growth explosion. In particular japanese market could seem more attractive for those brands that trust more on the importance of small production with high variety than be good player for cross market.

In my opinion we should start to understand that athough being well know brands is obviously important to get high position on sales for luxury market, to do that it’s not just matter of numbers or size of purchasing, rather it’s a meeting with conscious target and the achievement of their distinctive needs. That’s why a company like Hermes can confirm during the interview tWe believe small is beautiful. It might sound paradoxical, but when you make a product customers want, it sells well. However, if it sells too well, everybody stops wanting it. That’s why we focus on quality over quantity.”

Now China is still in the step of “I want to be among those people that can buy it, I want to be part of new purchasing power and I’ll follow the stream of european luxury brands” – but in Japan you’ll hit different scenario that could seems more like “I need it because represents myself, I now this brand and I’ll continue to follow it because it has always offered something of special for me”

So re-location is not  simple export (we for sure well know this difference) and being player on luxury field it doesn’t mean only  selling items at high price to high customers but probably meet them and their needs first of others.

Dr. Paolo Cacciato



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