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These MBA's Luxury Ventures Are Using Digital Tech To Challenge Top Brands

Digitization and consumer shifts are changing the face of luxury

Thu Feb 25 2016

BusinessBecause
The winds of change are sweeping over the luxury industry, battering at the gilded gates of some of the world’s top brands and opening up new opportunities for MBA entrepreneurs.

Nowhere is the clash between old and new felt more than in the luxury sector. In an industry where history and heritage is everything, entrepreneurs with new brands typically face an uphill struggle.

Louis Vuitton, the most valuable luxury brand in the world, was founded 150 years ago. The 179 year-old Hermès is valued at $19 billion; 95 year-old Gucci at $13.8 billion.

Yet the times they are a changin'.

“The big brands are not as secure as they used to be,” says Esin Akan, an EMBA graduate from London Business School, who launched her eponymous luxury label selling fully-customizable handbags. “Contemporary brands are getting more market share every day,” she says.

Despite competition from century-old brands like Prada and Burberry, Esin Akan has enjoyed constant growth since it launched in 2012.

“People don’t want to identify themselves with big brand names or logos anymore,” Esin says. “They want to be more unique, more contemporary.”

Behind the consumer shift is “a new wave of ‘new rich’”, according to Nyachia Knight, an MBA graduate from France’s EMLYON Business School who started up her own luxury events company.

“They are younger, more international and they want to be seen as first movers. So they spend more money to keep up this appearance,” she says.

This trend is especially visible among Chinese consumers who, according to a 2015 Bain & Co report, account for 31% of global luxury sales.

“There’s a growing upper-middle class with an interest in new designers,” says Esin, “so there’s definitely an opportunity for the future.”

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With this in mind, Lily Wang, an MBA graduate from Italy’s MIP Politecnico di Milano, started up her own business connecting luxury start-up companies and investors in Asia to Europe.

For Lily, pictured left, the dawning digital era is fuelling the transformation of the luxury sector and opening up more opportunities for aspiring entrepreneurs. “Consumer behavior is changing in line with the digital world,” she says.

According to a 2014 McKinsey report, 40% of luxury purchases are in some way influenced by consumers’ digital experience.

Online marketplaces, which sell luxury products for commission, are now focusing more on contemporary rather than established brands. Esin’s main focus is online sales. “For me, that’s the future,” she says.

While many leading luxury brands have been slow to adapt to the digital era, Burberry was amongst the first to expand into new markets through its use of mobile-based social media platforms like Instagram and Snapchat.

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While he accepts that digitization brings huge marketing benefits, Sebastian Kumeth, an MBA graduate from Grenoble École de Management, thinks that new online channels have their limitations.

“The internet is a nice platform to promote your brand but it doesn’t necessarily bring you the sales in the end,” says the Bavaria-born entrepreneur, pictured right, who set up his own high-end coat brand, KUMETH, in October 2014.

“If you charge a lot of money for something, at some point it has to be justified,” he continues. “It’s very hard to justify it online with a photo rather than showing it to a customer.”

On one hand, the internet is fuelling a trend towards affordable luxury. Glam Squad is a New York-based, on-demand beauty provider, which delivers professional in-home beauty services for a fraction of the normal cost.

Sharing economy ventures, too, are allowing people to enjoy luxury experiences for less. One Fine Stay is like a high-end Airbnb giving holidaymakers access to luxury penthouses in exclusive areas in London, Paris and New York, while Social Flights lets users book on to unused seats in private jets.

Yet the demand for high-end products remains.

“There’s a trend of people going back to quality rather than paying premium for a brand,” says Sebastian. “People look at our collection and say that the quality we offer is something that they haven’t seen for a long time.”

Student Reviews

emlyon business school

Student

Verified

4/12/2023

On Campus

Intense courses, helpful professors

I am an international student in my 3rd year and I love going to this school and do not regret chosing it for my BBA. The classes are helpful, professors are always there to help as well and we have a very understanding administration.

Student

Verified

18/03/2023

On Campus

Leadership in an amazing city

I decided to do my exchange in Emlyon because I wanted to get out of my comfort zone, and I found a space with very capable People.. participatory, empathetic and full of leadership. I will never forget Lyon, apart from giving me an unforgettable experience, he gave me great friends

Student

Verified

23/11/2021

On Campus

A lot of opportunities professionally and socially. A unique program in France.

You can choose your courses and do your internship, exchange whenever you want. It's flexible and adapted to the needs of each student. A great program and a great city! Professionally, it opens a lot of doors for you to find internships or jobs in France or abroad thanks to the network and career events.

Fabian

Verified

7/06/2020

MSc in Digital Marketing

Combining both worlds into one, this course gave me all the on-demand technical skills in data science while maintaining a business-oriented approach. Thanks to the strong academic profile of this university I was able to secure an internship and full-time job at Amazon.

Student

Verified

14/10/2018

Top Business School fostering innovative entrepreneurs

EMLyon is one of the best business schools. The campuses, associations and courses offered provide the students with the best options to build the future they have chosen. The various opportunities to study and work abroad also offer a deeper understanding of the world, not only economy-wise but social, which helps the student become as well a better individual and not only a pre-formated business school student.

Student

Verified

9/06/2020

Emlyon campus in Paris

It has a great international community and you have access to many international tools, courses and professors. I had many networking events and workshops for students. Campus and some details of the program could have been improved or need to be bigger in order to have a better student life.

Student

Verified

21/11/2022

On Campus

Entrepreneurship

Overall good content and good activities. Lack of administration but still ok. Good flexibility and liberty offered to the students. Finally, the amount of internship is also a good way to improve qualifications.

Student

Verified

25/05/2020

Good Reputation and International Business School

The course was not well adapted but it was up to the mark. The professors are very well experienced and their experience comes in handy while working on assignments. The facilities on the campus are top class. Truly professional. I really like spending time in the learning hub and using all the available resources. Lyon is an amazing city. You will never get bored.

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