Ultimately, the primary problem for the top luxury brand is counterfeiting. Counterfeiting has risen sharply mainly because of China but also other Asian countries such as Korea and Hong Kong. Fake bags with the Louis Vuitton logo are mainly exported to Europe and the United States but there have been cases of duplicate Louis Vuitton bags exported from other low-cost Asian locations to the Japanese market. A few scandals have already been reported in Japan as Japanese consumers have been more and more eager to buy Louis Vuitton bags at inexpensive prices. Now that the counterfeits are hard to distinguish from authentic products, Japanese consumers no longer mind buying fakes, even though they probably own a couple of authentic bags. This remains a challenge for luxury sector firms who have a premium pricing policy for their products. The best solution to this problem is to monitor the market and take strict legal action against the people who are involved in counterfeiting.
It is also worth nothing that the firm cashed in on the opportunities of the economic boom in Japan in the 1980s, with maximum sales of more than five million bags at premium prices. Louis Vuitton’s international expansion into the Japanese market was at the right time, which in turn helped the firm to capitalize the opportunities. This gives us insights into the need for international business to focus on emerging markets that have a probability of an economic boom.