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July 23, 2008
For many Japanese, and in particular those who spend much of their days and nights pursuing their career, the internet is increasingly becoming an option for shopping for luxury goods. Though slow to start, many luxury brands have made great efforts in the past few years to increase their presence and online shopping capabilities.
According to a 2006 Ministry of Economy, Trade, and Industry e-commerce survey, the market scale aimed towards e-commerce consumers increased by 27.1% from the previous year, or 4.4 trillion yen. One of the highest ranking areas in the e-commerce survey was the clothing and accessory based retail industry.
For quite some time many Japanese domestic apparel makers have had online shopping available on their homepages. In addition there are also many dedicated fashion and accessory websites which carry these and other brands and have been making fairly solid and steady efforts in dealing with online shopping.
In this regard, foreign luxury brands such as Louis Vuitton and Chanel up to recently have been rather passive towards online shopping. Opening a dedicated Japanese language shopping site was a good start for these types of brands when they actually made their move.
The turning point was in the fall of 2005 when Tiffany's initiated their online shopping website. This trend was continued in 2007 when Louis Vuitton began their online sales in Japan. In June of this year Cartier entered the fold, as did Christian Dior of the Louis Vuitton Moet Hennessy group.
It is often difficult to import certain products into Japan, thus creating difficulties for consumers for quite some time. However for many brands their expansion into online shopping is coming a bit late relative to other regions. To understand why foreign luxury brands are showing an interest in online shopping now it is helpful to look back at the circumstances relating to Japan and abroad.
There are a number of reasons why overseas luxury brands postponed dealing with online shopping in Japan. One of the main causes is the high level of concern given to image by luxury brands. For some it was a matter of taking time to ascertain the future prospects of how their image on the Internet would be over time and to carefully consider the outcomes of an online presence.
In relation to this was the concern of whether the premium goods could have a strong appeal and impression online, and to make sure whether their main audience, the many Japanese females with disposable income were actually using the Internet or not and if there was consistency in their usage.
In recent years of course web technology has been rapidly developing, in particular image and movie capabilities, as well as web features and applications which consider working women.
In the past year or two then, as technology has advanced overseas luxury brands have also developed their web presence, in particular media used for advertising promotion. Of course another issue including relating the plans for the website with other plans such as online shopping and real-world plans and procedures played a role.
Other factors have affected the recent run towards online shopping for luxury brands. Market conditions in Japan and the world, in particular rising costs of labor in China and raw materials, as well as the strong Euro and decreasing sales in general have contributed to the sudden rush in recent years towards online shopping from brands which had previously shied away.
Furthermore, the effects of online auctions selling fake merchandise and independent importers were conditions that certainly played a part in the decision to begin online sales.
In fact, as the online auctions selling fake goods and independent importers are arrested or have barriers to their activities put in place, this presents favorable conditions which can be well received by the Japanese agencies representing luxury brands.
So with these conditions added together luxury brand leader Louis Vuitton began their online shopping, an act which was soon followed in succession by numerous other brands.
As it turned out the time when the websites are most active is in the late evening, after the actual shop has closed up, a fact that is being taken as evidence that their online shoppers are people who are too busy with work to venture out to the real-world location of the store.
Furthermore, at present many of the goods sold online are quite basic, and for limited edition goods as consumers understand more about the quality and they feel much better about making their purchases. Predicting the amount sold of basic items and reaching a balance of supply and demand can be relatively more easily achieved.
It can be seen that online shopping for luxury brands in Japan is not something which can be ignored and will continue to bring value to the brands through supporting real-world sales as a part of the overall strategy of luxury brands.
July 11th, 2008. Nikkei