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Sunday, Sept. 15, 2002


'Socialism' goes shopping at Vuitton free-for-all

As an economic power, Japan is the ideal that the rest of Asia aspires to, but it isn't merely Japan's vast material wealth that everybody envies. There's a social aspect to Japan's success that many see as even more desirable.

Several years ago, a high-ranking Chinese leader was asked by a Japanese reporter if China wasn't abandoning socialism with its new business-oriented policies. He said that socialism was still China's goal, but now it was the socialism practiced in Japan.

There is no better active illustration of this idea than the excitement that accompanied the opening of the new Louis Vuitton store on Omotesando in Tokyo on Sept. 1. Waiting in line for the store to open were 1,400 people. Most had waited overnight, but there were many who'd been there for three days. To commemorate the opening, Louis Vuitton Japan put on sale 1,000 handbags with labels saying "Omotesando 2002." They sold out immediately, as did a limited edition of 50 watches, each of which cost 350,000 yen.

The hullabaloo wasn't surprising. Japan accounts for one-third of the French bag-maker's business worldwide. What is interesting is that the vast majority of people who buy Louis Vuitton products in Japan do not belong to the same "class" that buys them in the rest of the world. If you look at photographs of the people waiting in line Sept. 1 for the store to open, you'll notice a marked prevalence of jeans and T-shirts.

The media had quite a laugh. Shukan Josei's article about the opening included lots of cute anecdotes about middle-aged men asking dumb questions, teenage girls crowded around catalogs squealing in ecstasy, and hicks trying on as many outfits as possible with no intention of buying.

This could never happen in Europe, where brand-name boutiques are rather forbidding. One certainly wouldn't enter a Louis Vuitton shop in Paris or London wearing jeans and a T-shirt. The conventional wisdom about brand value is that the only way to keep the price high for an item whose worth is based on a logo is to maintain that logo's exclusive appeal. This wisdom doesn't seem to apply in Japan.

For years, Japanese women tourists were derided in Europe for barging into boutiques and browsing as if they were in Seibu. Snobbery is every bit as prevalent in Japan as it is in the West, but Japanese consumers believe that cash in hand and the will to buy are the only criteria needed to gain entrance to any retail concern, be it Walmart or Harry Winston.

Louis Vuitton has an advantage since their main product, leather bags, is fashion-proof. During the frenzy that accompanied the store opening, celebrities were appearing all over the media, showing off their own bags. Invariably, it was the practical aspects that appealed to them, the fact "that you can use it forever."

Such a justification is what made Louis Vuitton famous in the first place, because Europeans who bought its luggage expected it to last the rest of their lives. These days, however, authenticity is more important than practicality, which is why the authorities are so keen about cracking down on fakes. This summer, doubts were raised about the source of Burberry tartan scarves -- a vital accessory for Japanese high-school girls -- sold in hoi polloi havens like Itoyokado and Jusco since 1998. The supplier in the U.S. has gone bankrupt and thus, according to the wholesaler, the authenticity can't be verified, so refunds are available to any purchaser who wants one.

Louis Vuitton, which expanded into clothing in 1998, never bargains with customers or holds discount sales, something that Japanese "DC brands" have to do to make room in the shops for the next season's line. Louis Vuitton's purpose is to maintain "brand value," but there is another, more social effect. As deflation increases and consumption opportunities expand, a real problem has arisen with discarded clothing. The recycling of textiles has hit a wall. Ninety percent of unwanted apparel is either burned or buried.

This is partially related to the Uniqlo revolution, which made possible high quality clothing at very low prices. The sad fact is, the cheaper the shirt is, the more likely it is to be trashed. According to a Japanese recycling NGO, the amount of discarded clothing has increased fivefold over the last 10 years, and each year the amount that commercial apparel recyclers can accept goes down. That's because demand for recycled clothing is going down, and it isn't expected to increase ever again.

In other words, the consumption cycle is moving way too fast. Uniqlo has in effect become a victim of its own success. Sales in August 2001 were 30 percent less than they were for August 2002. Louis Vuitton sold 125 million yen worth of merchandise Sept. 1 at the Omotesando store alone. And you can bet that when the people who bought those items get tired of them (if they ever do), they can resell them for big bucks.

This isn't to say that Louis Vuitton will save the world; or that the Japanese mind-set, which sees The Brand as a reason to live and suffer the indignities of substandard housing and three-hour commutes, can or should be imported to the rest of the world. But Louis Vuitton's success in Japan has ramifications that go beyond the merely commercial. When that Chinese leader said Japan's peculiar type of socialism was worth emulating, what he meant was that freedom does not come when every citizen has equal access to a voting card, but rather when everyone has equal access to a Mastercard. Shoppers of the world unite!

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