By Barrett Ishida
How do you fight off a so-called recession? The Japanese answer, it seems, is by buying more luxury.
Swiss banking group Julius Baer recently did a report on Japan's wealth and the results are encouraging it to strengthen its own wealth management services in the country. Not only does Japan account for 19% of global luxury sales - more than Europe - but it also has seen prices for premium items rise. Luxury homes in Tokyo's Minato Ward, for example, increased 11% from the previous year, and similar upward trends were seen in weddings and women's shoes, along with many other items.
Perhaps it's this seemingly samurai spirit-laden luxury market that has Christian Dior wanting to invest more in Japan in the next few years. CEO Sidney Toledano said, "Japanese are still wealthy...the Japanese have accumulated great savings and like to invest in luxury and high quality products. At Dior we believe in Japan as a market." In a country where the citizens make most of their extravagant purchases domestically, that's a good thing. Add the increasing number of Chinese tourists - who spend 3 times more abroad than they do in China - it's no wonder why global consulting firm Bain & Company also believes Japan's luxury market is poised for significant growth.
It doesn't stop there, however. While you wouldn't think clothes would be at the top of people's shopping lists when that cold word "recession" is being thrown around like snowballs, H&M country manager Christine Edman says that 2014 "has been a very good year" and will be adding 3 new stores to their 45 in the country this year. Not only are the women fashionable, but she points out that "Japan is an amazing market for fashionable men who are also very trend sensitive."
The Japanese luxury market is viewed as not only an important consumer market, but also as a test market where if premium products succeed, chances of succeeding in other markets increases.
So while recent headlines read like the Grinch may be writing them, Japan is apparently fighting them with the unexpected weapon of luxury.