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Brexit influence on uk economy
Luxury consumer behavior essays
The concept of luxury
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Recommended: Brexit influence on uk economy
United Kingdom has been part of the European Union since 1993. EU is both a political and economic agreement between 28 European countries. The idea came after WWII, that when countries are trading with each other, then it is highly likely that war will be avoided. Since then, it has evolved to a single market with free trade and it is as if acting as one country.
But this all changed in June 2017, when UK voted 52% yes at the referendum to leave the European Union until 2019. Thus, creating the expression BREXIT that stands for Britain joined with exit. Since the result of the referendum, the country is facing a big drop on the sterling value. However, consumerism had its positive impact. According to The Guardian (2016:online) ‘the
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According to the NY Times (2016:online) ‘Chinese market account for almost the half of the global luxury market, providing a high demand of goods in different segments’. (http://www.nytimes.com/2016/04/05/fashion/china-luxury-goods-retail.html). Younger and more sophisticated generation of shoppers are emerging in Asia looking for new aspirations and creating a new target market for luxury goods. The consumption has gone beyond the logo items (which can affect many brands), these new consumers look for a lifestyle and quality – it is not only purchasing anymore but about the …show more content…
"In 2015, Japan was the second-largest luxury goods market in the world, worth €20 billion (about $22.7 billion)" (https://www.businessoffashion.com/articles/global-currents/in-japan-luxury-flourishes-while-economy-flounders). One of the main reasons for this boost is the increase of Chinese tourism in the country, due to a weakness in yen and relaxed rules of visa. The devaluation of the yen against yuan, made the luxury goods in Japan cheaper for them and, as a consequence, they spend more in luxury brands (representing 40% of total sales).
Japan has always been one of the leading markets in luxury consumerism. The biggest global companies such as LVMH, Richemont and Kering have a strong presence in the country through retail. The market competition is high in the country and the companies have to adapt themselves to consumers need to succeed.
http://www.euromonitor.com/luxury-goods-in-japan/report
The economy’s reliance on it meant they must keep trading for more and more silver, in exchange for chinese luxury good like silk.
Secondly luxury products are easy to counterfeit, some countries such as china, turkey, and other still have to improve their IPR policies
The year is 2001. China joins the World Trade Organization (WTO) and Americans give way to the new “Asian powerhouse.” China has grown 9 percent a year for more than 25 years and is recorded as the fastest growth rate for an economy in history according to and abstract by Peter Katel in the CQ Researcher. With exports rising from 38.8 billion to 196.7 billion (a 400% increase) from 1994 to 2004 to the US alone, no wonder why China has gained new popularity with the business world. In the same article Peter Katel goes on to state that two-thirds of the world’s copiers, microwave ovens, DVD players and shoes are manufactured in China. With this powerful advantage that China has, its promising future does not seem that far away. The graph to the left shows the US merchandise trade with China. As you can see, the US exports to China have fallen and its imports from China have increased greatly from 1994 to 2004.
The notion of luxury has been present in various other forms. The role was unique in earlier times as it is now. Earlier possessions of raja’s and maharajas were considered to be luxury. Division of social class structure led to this difference where luxury was limited to rich people that is whatever poor people cannot have and elite can this was termed as luxury. During the last 10 years, the luxury sector has undergone drastic change. Barriers that were present earlier has been lowered down due to globalization and social media. Globalization has spread like fire for the growth of fashion industry and market strategies have attracted the consumers significant shifts in cultural values and beliefs, consumer preferences and
The modern day Chinese society has revolutionized the luxury industry as the Chinese consumer is receptive to luxury brands unlike any other consumer in the world. As a society that is fueled by Urbanization, with a myriad of cities that are economic centers of the world, China is now a country that has made great strides through industrialization to become an influential leader with purchasing power that transcends beyond gender and age as younger consumers are aspiring for luxury products, in which companies worldwide are marketing their luxury products in order to appeal to the Chinese consumer who is enamored by quality despite cost.
How many of us really think about “Why we consume the way we do?” and “How do we constantly support the economic process of consumerism?” Some people might say that they need the all of the flashy electronic gadgets like phones, tablets, and hover boards or they must have those 3,000 designer jeans because they’re trending right now on social media. I asked myself these questions and I realized that I’d never really consciously thought about how Americans consume until now.
Export trends have been an important factor during Japan's present economic adjustment period, and the structures of Japanese exports, together with the imports, have been changing substantially in recent years. The changes in the country's export and import structures during the 1990s can be characterized by the following three key developments: (1) the weight of IT-related goods has been rising in both real exports and imports; (2) real imports of consumer goods from East Asia has been increasing; and (3) the US remains Japan's largest trading partner as a single country. Due to these factors, maintaining its comparative advantage became the priority in the current global economy.
On the otherhand, South Korea is on the fit in stage which means they use and consume luxury brands to show their status, wealth to the other people in their environment. Japan is in the fifhth stage of “ The spread of Luxury Model” which is named as a “a way of life”. (Chadha and Husband 2006: 46). Therefore, Japanese people have high expectations from luxury brands according to the characteristics above.
Mahadevan, Neetha. "VW Brand Sales Up on Chinese Demand; Growth in China Offsets Drop in Europe and U.S." Wall Street Journal (Online) Jan 10, 2014. ProQuest. Web. 25 May 2014 .
The company’s target market appears to cater to every type of person in the luxury sector. This is reflected with its high class amenities, such as the Michelin restaurants and spas. The Mandarin Oriental International Limited Annual Report 2014 outlined that the leisure travellers have had higher demand recently over business travellers, as well as, “…higher spending leisure customers now making up close to 50% of the Group’s room nights” (Photos.mandarinoriental.com, 2014).
Louis Vuitton, Chanel, Gucci, Dior, Prada, Jimmy Choo, Hermes, Rolex…. These are all; luxury brands and they are everywhere. The luxury fashion market represents an important and increasing sector of worldwide retail (Husic and Cicic, 2009).
By 2002, Moet Hennessy Louis Vuitton was the world’s largest luxury products company, enjoying annual sales of 12.2 billion euros. LVMH carries the most prestigious brand names in wine, champagne, fashion, jewelry, and perfume. Upon entrance of this luxury product industry, LVMH was aware that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, making consumers feel as though they must buy it, or else they will not be in the moment, and thus will be left behind.
According to Dubois and Czellar, the Chinese elite’s attitude via luxury goods has identified to six attributes: excellent quality, uniqueness, very high price, emotional content, superfluous/inessential and the last one brand history and heritage.
“Despite worldwide softness in the sale of luxury goods, LVMH has cemented its position as the world’s largest and most profitable player in the category. To stay there it must keep its customers loyal and its brand strong and find new markets worldwide” (Hazlett C. 2004). That is why in its mission they state to represent the most refined qualities of Western “ art de vivre” all around the world. Their objective is to be the leader in the luxury market, continuing to transmit elegance and creativity. This poses some major challenges, the main one is to keep being the leader in the luxury market through a sustainable growth. The main problem to achieve it is the high dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one country it affects LVMH directly that is why.
The United Kingdom was a member of the European Union. The European Union is an example of the second most integrated arrangement, the economic union. Therefore, voting to leave is a direct effort to reverse regional economic integration.