Japan has the third largest economy in the world, with its consumers accounting for nearly a quarter of luxury products, writes the NYTimes. Young Japanese women and men have been obsessed with luxury brands for the last few decades.
Young 23-year-old woman Maki Kusaka has 10 Gucci handbags. Any change in values — not only loss of income — could affect the luxury market, as it races to open boutiques in China.
Though luxury products are viewed as a sign of the upper class in other countries, in Japan, they have long been seen as an integral part of middle-class life. Middle-class consumers often skimped on vacations or expensive meals so they could buy luxury clothes or handbags. Now, analysts say, the triple disaster has jolted the Japanese into a new reality, sapping the materialist, feel-good spirit and replacing it with a focus on helping others and a mood of back to basics.
Just a few months ago, Deutsche Bank expected the luxury market to grow 8.9 percent this year. Now the forecast is slashed to 2.1 percent. Not all analysts agree that the damage will be long-term, but concerns are growing that Japan’s nuclear reactor problems are far from being under control.
It is true that many Japanese consumers are asking why they were focused on luxury handbags and not more relevant matters about life’s priorities. But analysts remind us that America did similar soul searching after Sept. 11, and luxury consumption not only returned to normal but gained strength.
Among the most exposed are Hermès, Bulgari, the Gucci Group, Richemont and LVMH Moët Hennessey Louis Vuitton, which derived 9 to 19 percent of total sales from Japan last year.