Lladró Japan
Few sectors have been as badly hit by the recent recession as the luxury sector. However, one European company has not just staved off disaster, but increased its profits for a fourth year in a row. Jérôme Chouchan, Japan president of porcelain art brand Lladró, attributes their gleaming performance to “product innovation, distribution innovation and advertising innovation.”
Lladró was founded in the Spanish city of Valencia in 1953 and today exports to 120 countries. The company started selling in Japan in 1986 through a joint venture with trading company Mitsui Busan, then in May 2008, set up a wholly owned subsidiary, Lladró Japan. Today they have over 100 sales-points in Japan and anually sell over 50,000 items ranging in price from ¥10,000 to ¥16 million.
All Lladró products are made in Spain, but they now include a few designed specially for the Japanese market. One is a samurai doll figurine marketed as a present for Boy’s Day on 5 May. Despite the doubts of their distributors, who were convinced Japanese customers would prefer more typically European products, the figurine has been a hit.
Another popular Japan-inspired item is a young woman reclining under a cherry blossom tree. “We get inspiration from the Japanese consumer,” says Chouchan, “but we don’t make an imitation product; we really create a new thing – very Lladró, but also very Japanese.”
Lladró subsidiaries worldwide have even taken a lead from Japan. “In India, we are developing some Krishna pieces, which are selling well there and all over the world where you have Indian communities,” says Chouchan. “We are also doing something similar in China.”
In Japan, Lladró have broadened their distribution network, reducing a more than 90% reliance on department stores to around 75% by developing their website, and through sales in interior goods shops, their own shops, and selected catalogue shopping. Chouchan also made the bold decision to join the Japan Doll Association, a venerable and traditionally minded industry group.
The request for membership provoked an interesting debate. “On one side you had the centuries-old traditional doll makers who said the association should not accept foreign companies,” recalls Chouchan.
“But other companies were saying that the world has changed, that Lladró is making good products and respects the etiquette of Japanese culture, that they help the market develop because they invest a lot in media.”
The progressives prevailed and last September Lladró became the first foreign company to join the association. As a result they can now sell their dolls in a range of traditional doll shops.
The company took a similarly radical approach to their advertising. First, they targeted customers in their thirties, rather than the more typical 50-something porcelain art collector. They also placed adverts on TV, and in newspapers rather than glossy magazines. Lastly, they arranged advertising tie-ups with well-known Japanese celebrities such as kabuki actor Koshiro Matsumoto.
New strategies were needed for Japan’s evolving luxury market, Chouchan believes. “It has gone from mass-luxury – say, where everyone buys the same bag – to a more European type of consumption, with each group or micro-segment wanting its own style,” he says.
“I think the Japanese are the most sophisticated consumers in the world. They have gone through all the stages: bubble, deflation, recession. Now they have reached the stage of personal taste.”
Chouchan regularly talks with Lladró customers, as well as distributors. Such feedback has proved invaluable. “For example, some consumers had questions about the face of our Girl’s Day doll figure,” recalls Chouchan. “I learnt that for the new model, we should have a face rounder and more typically Japanese.” Accommodating that preference helped make the figurine one of Lladró Japan’s most successful products.
In January 2009, Lladró became the sole distributor in Japan for Steiff teddy bears. But unlike the German company’s previous distributor, they sell the bears in the living and home sections of department stores rather than specialist toy shops. The bears and other animals are sold not just as toys, but also as premium gifts, and even decorations. According to Chouchan, some in both companies wondered if two such unique luxury brands could work together. Such doubts were quickly dispelled when Steiff’s sales increased over 25% in one year.
But, in fact, Chouchan isn’t fond of the word “luxury” to describe Lladró’s products. “We describe our porcelain art as ‘emotional premium products’,” he says. Japanese customers have a special relationship with the Lladró products they choose. After all, the figures are unusual among other luxury products – say bags, watches or perfume – in that they have no immediate practical use.
“Each of our products has an evocative name, a meaning and a soul,” says Chouchan. “Customers have a unique relationship with each creation ... it is an emotional link.”