Indonesia will become the largest luxury market in Southeast Asia over the next few years, Ravi Thakran, LVMH’s head for South Asia, South East Asia & Middle East told CNBC.
According to him, Indonesian consumers currently buy their luxury goods mostly from Hong Kong and Singapore, but Indonesia’s political stability and improving retail infrastructure will help boost the country’s luxury sector.
“I really see a new ‘I’ emerging in BRICS. Going forward, we believe the Indonesian market will be one of the big surprises,” said Thakran, who added that the country remains an under-penetrated market for high-end goods.
LVMH is planning to open 20 to 22 new cosmetic stores under its Sephora brand in Indonesia over the next two to three years as well as a big flagship store for Fendi within 12 months.
LVMH, the world’s biggest luxury goods group, has remained largely unaffected by global economic uncertainties. Its 2011 profit reached $4.04 billion and sales jumped 16 percent on year. Around 25 percent of its revenue comes from countries in Asia, excluding Japan.
Thakran said that Asia’s luxury consumers have ‘come of age’ and they are acquiring a more refined taste with watches and jewelery being particularly popular. “When you look at jewelery or watches, Asians are buying the highest priced segment and the most sophisticated of the products.”
LVMH remains positive on China, which is currently the world’s second largest luxury market, with Thakran saying that he sees no sign of a slowdown in the country’s luxury segment.
“In fact, Chinese numbers across the region, be it in Dubai, Singapore, Hong Kong, they are buying more and more in all these markets.”