Louis Vuitton Enters Mongolia

So today I came across this article in Women's Wear Daily, I've enclosed a link to the article, but I think one has to subscribe to the magazine to read it in its' entirety.  So, I've gone ahead and copied and pasted the article below as well.  If, when you read this, it's missing, that means I got into trouble from the publication for re-printing (laughing).

I'm all for progress, believe you me.  But a part of my heart sank when I read about Louis Vuitton opening a store in Ulan Bataar, the capital of Mongolia.  True, there's wealth in Mongolia, and I've witnessed with my own eyes Mongolians carrying a Vuitton bag (whether it was real or fake is another thing, nowadays you can't tell the difference).

There's something unspoiled about Mongolia - it's like the last frontier (my blog).  Mostly untouched (note: mostly) by the western world was what made is so charming.  I refuse to speak about it in the past tense.  My dear friend Robert La Mont, who was Chief of Party, for the Mongolia Judicial Reform Program from 2001-2006, said it best,     

    "Personally, I can't believe that Louis Vuitton [opened a store in UB]. I suppose it shows that Mongolian rich     have become richer and as status conscious as any new rich. It is kind of sad that status now comes from a     bag rather than a horse in the land of the Great Khan, but it is possibly a part of the inevitable homogenized     direction of globalization. I am glad I lived in Mongolia when it was still unique."               

Robert left for Jakarta for another assignment in 2006.  I know exactly where this store is, located on the ground level of "Central Tower" which you can see being built right behind me in this picture.

In some ways, it's a smart move for Louis Vuitton (and Zegna who opened their store a month earlier), who's quest for global domination is almost complete (next? Louis Vuitton boutique on the US base in Antarctica?).  There's a few little boutiques that carry beautiful items made by local designers and one huge state department store, aptly called the "State Department Store". 

Neither carries brand names adorned in Vogue magazine.  To me, I'd rather keep the city the way it is and let the wealthy Mongolians go to Beijing, Seoul, or Moscow to make their luxury goods purchases.

Wealthy Mongolians

I asked my dear friend Buyan, who is an executive with Mobi-com, the "T-Mobile" of Mongolia.  I asked him what his thoughts were and it was interesting.  He told me that huge coal, copper, and gold projects have begun like Rio Tinto and Ivenhoe Mines in "Turqouise Hill" or "Oyu Tolgoi" have started mining and because the economy is so small, it literally is changing the economic structure of Mongolia.

Another example, he told me, is the Ford Expedition, which entered the marketplace this year.  One hundred vehicles were sold in Mongolia whereas in England only four were sold.  But, I have to say Mongolia's terrain would suit an Expedition well (and maybe the mine purchased all 100 trucks).  He compared Mongolia to the likes of Russian "neuvo riche" driving around in Lexus LX570 and Toyota Landcruisers, "which in Mongolia price is 70.000 to 140.000 usd...and a lease is 20% interest annually." 

With capitalism comes debt, he finished off with, "household income [in general] is not so good. People can see rich people by their consumption but not their banking information and business....this is probably what LV saw."  In other words, you really never know.

Here's the article:

PARIS — Sukhbaatar Square in Ulan Bator, the capitalcity of Mongolia, is so central that many of its million-plusinhabitants are bound to traverse it on a regular basis.

Thatmeans its newest resident, a 5,300-square-foot Louis Vuitton boutiquewith a two-story high, 112-foot wide wraparound facade, is aconspicuous beacon of luxury in a remote country becoming wealthier bythe minute, thanks to enormous gold, copper and uranium reserves.

Vuitton,a luxury pioneer that opened its first store in Greater China in 1992,is excited to be among the first to arrive in the region. “Why befirst? You have 100 percent share of voice,” enthused Yves Carcelle,Vuitton’s chairman and chief executive officer, who is slated to hostan opening celebration Friday. “It helps impose your brand as thestandard of luxury. I honestly think it’s the right move.”

Carcelle said Vuitton’s 440th store is projected to be profitable within its first year of operation.

Thanksto the Internet and Russian fashion magazines, Mongolians are alreadyfamiliar with the Vuitton brand and have been purchasing its productsfrom Vuitton stores in three popular destinations: Moscow, Beijing andSeoul, Carcelle said. Another promising sign is the presence of manyVuitton bags “on the arms of elegant women” in Ulan Bator’s trendynightclubs and restaurants, he added.

Vuitton is also clearlybanking on the vigorous economic development expected in tandem withmajor mining ventures. Already, the skyline is dotted with constructioncranes. “It’s a country that knows it has to modernize but wants to doit in a controlled way,” Carcelle said.

The two-level boutique in the new skyscraper Central Tower — whichalready houses an Ermenegildo Zegna shop that opened earlier this month— features a 30-foot long “bag bar” flanked by men’s and women’sdepartments, each devoted to extensive selections of leather goods,footwear and accessories.

Upstairs is a circular VIP room, theshape reminiscent of a yurt. A Vuitton saddle was made especially forthe store in recognition of Mongolia’s nomadic roots and strong horseriding culture.

Carcelle noted VIP rooms, and the elite service that comes in tandem, are particularly prized in Asia.

Tomark the opening, Vuitton plans to donate more than 6,000 educationalbooks to support some 220 primary schools across Mongolia, still a poorcountry.

Meanwhile, Vuitton continues its global retailexpansion, with major stores slated to bow in December at CityCenter inLas Vegas and One Central in Macau. “Casinos are always a good vicinityfor luxury,” Carcelle said. Next year, Vuitton will enter two newcountries, Lebanon and the Dominican Republic, he added.