Share the joy
Ever wondered why the Louis Vuitton sells significantly more handbags in Asia than it does in entire Europe or in USA? Most people believe that because most of the well-known international brands have originated in Europe or the U.S., Westerners care more about branded products than Asians. Then what explains the paradox of Louis Vuitton’s resounding success in Asia?
Contrary to what most people would predict, recent research found that in reality, it is Asians who have a strong preference for branded products whereas Americans care much less about the brand. For example, in one study, the authors asked people to choose between two similar breakfast cereals, one of which was less expensive and from a generic brand whereas the other was more expensive and from a well-known brand. Asians chose the more expensive branded product 50% of the time but Americans chose it only 30% of the time.
A second study by the same authors found that the reason for Asians’ greater preference for branded products is that they care more about social status than Americans. Possessing and displaying branded products makes one appear like a high-status individual, and so Asians are more likely to go with branded products.
What this mean for Asian consumer product companies? Do not be worried about entering European or North American markets because you do not have a well-established brand. Westerners do not care about brands as much as Asians, so small family brands with quality products are much more likely to succeed in North America and Europe than in Asia.
Share the joy