Baccarat Pacific KK, the Japanese unit of French crystalware manufacturer Baccarat SA, has been growing quickly since it established itself as a luxury brand in Japan. In 2006, the Japan unit“s sales…
Baccarat Pacific KK, the Japanese unit of French crystalware manufacturer Baccarat SA, has been growing quickly since it established itself as a luxury brand in Japan. In 2006, the Japan unit“s sales were roughly four time higher than a decade earlier at JPY 6.2 billion. In a recent interview with The Nikkei Marketing Journal, President Hiroshi Ogawa said the firm had grown rapidly, because it had succeeded in having the culture of crystalworks put down roots in Japan. “Before Baccarat Pacific was set up in 1984 as a wholly owned subsidiary of Baccarat, its crystal products were sold in Japan only through a trading firm, which initially served as a sales agency for the French firm”. “When I was a manager of the trading firm“s sales division, I proposed to the glassware maker“s head office that it establish a Japanese subsidiary”. “But because Japanese had no tradition of using crystalware in their daily lives, we struggled for several years after our firm“s founding. At the time, no one chose crystalware as gifts for wedding ceremonies, while some people used crystal as flower vases, but only in the summer”. After Baccarat Pacific KK set up a store at the Imperial Hotel, the outlet reported no sales for three days, he said. It was not until the late 1980s that the culture of crystalware finally began spreading in Japan. Hiroshi Ogawa attributed a 300% rise in sales over the decade through 2006 to a change in the brand strategy in 1994. “Under the new approach, we tried to nurture Baccarat as a luxury brand that serves every aspect of our customers“ lifestyles and move away from Baccarat“s initial image as dishware”. “Although Baccarat products were previously on display only at household goods corners in department stores, we decided to develop the brand into a popular luxury name comparable to Louis Vuitton or Hermes”. “Our products are now available at 33 department store units, 13 of which are selling our glassware on floors that specialize in select brands”. Asked as to what brought about the change, Mr. Ogawa said it was the opening in 1995 of the firm“s directly run outlet in Tokyo“s Marunouchi district. “At the time, the district was not yet populated with a lot of big-name brand shops, as is the case now. Some employees wondered if it would be the right place for our store, instead of such fashionable areas as Ginza or Omotesando. But I did not care much about it and set up the store there, and it eventually proved successful”. “Until then, our customers were mostly rich people with annual incomes of at least JPY 10 million. Locating our store in Marunouchi also helped find fresh demand among businesspeople working in the neighborhood and other customers. We take pride in having helped develop the district into a busy shopping area”. In the past decade the ratio of sales has shifted from tableware to giftware, Mr. Ogawa said. “Although we were generating about 65% of sales from tableware around 1996, the percentage has fallen to 40% or so. Instead, sales of crystal jewels in the Baccarat Bijoux line, flower vases, chandeliers and other products have increased to make up for the loss”. “Sales of Bijoux products have gone up particularly fast after we introduced pendants for men in 2005 and currently constitute almost 20% of total sales. Five years ago we began promoting chandeliers. Despite expensive prices of several hundred million JPY each, they sold briskly last year, with their sales rising to about 8% of total sales”. Asked about the trend for equipping several directly run stores with bars, Mr. Ogawa said it enabled customers to enjoy drinking from Baccarat glassware and learn more about the product; visits to stores with bars tended to be in the order of 30-60 minutes, much longer than in stores without; and demand in these stores could be found among customers who would not otherwise be Baccarat shoppers, particularly men, who now comprise about 60% of the customer base.