Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .


Due Diligence: The expansion of luxury brands in Emerging Markets

Due Diligence: The expansion of luxury brands in Emerging Markets

Global expansion of many luxury brands has been surprisingly resilient to shocks in recent years. Much of this has been driven by their growth in emerging economies; Africa, Asia and the Middle East, where purchasing power and appetite is increasing and fuelling growth. However, as many of these brands become famous outside their infrastructure, they can rely on third parties that can do their brands a disservice.

The shift in demand, which was previously concentrated in the western hemisphere, is now making its mark in the global south. China has emerged as a critical player in the luxury goods market, with other countries like India, Malaysia, and Central Asian states following suit.  

We have seen fast acceleration of some brands internationally, with a real focus on emerging markets.  For example, jewellery brand Messika has had dramatic growth and in 75 countries. Aside from conventional markets such as Europe, the UK and the USA, you can now find Messika products in both Madagascar and Kazakhstan, the latter is where it opened one of its first monobrand stores.  The same is true for Cartier, whose brands are in jewellery stores from Chile to Vietnam.  

A huge amount of money is going into expanding in these emerging markets. Messika recently hosted an enormous event in Kazakhstan led by representatives out of Dubai. It has a full monobrand store in Kazakhstan, alongside Premier Group’s operations.  Premier Group is also opening the Messika store in Uzbekistan in the new Tashkent City Mall. Other brands such as Panerai and Patek Philipe will also be present to service the growing middle class in Central Asia.

However, in the rush to expand, are these brands falling victim to their own success?  While the brands themselves operate serious standards of compliance and supply chain management, ensuring thorough due diligence through the process. In emerging economies, particularly run out of opaque third-party centres lit is hard to oversee the business practices used by partners who are in a rush to capitalise from the brand names.

So how can these companies protect their brands? Due diligence in the supply chain is vital, but it should also be carried out with forward looking partners and retailers. Licensing agreements in and through tax havens should be scrutinised, and multiple partners should be considered, making transparency a key KPI. Monopoly resellers should be broken as this could lead to complacency on the part of both the seller and the brand, with malpractice overlooked.  

As they expand, brands must do more to protect their reputation in these emerging markets they are quick to sell to. The pursuit of rapid growth is tempting for many and has proven lucrative. However, to protect a reputation as world leading suppliers of jewellery, brands must look forward to. Unwittingly, their name is being used for someone else’s gain, and it may cost them in the future.  

Global Banking & Finance Review


Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post