On the evening of December 18, traffic on Beijing's East Third Ring Road came to a standstill. Vehicles were backed up for at least three kilometres. This was not typical Friday evening rush hour traffic, however. It looked more like a huge event was being held, and that half of the city had stopped for it.

This was in fact the case that evening. Over 1,500 famous Chinese movie stars, singers, athletes and business elites flocked to the China World Exhibition Centre for a grand event featuring vibrant music and stunning acrobatic shows.

More than 100 journalists were also in attendance, to cover the only kind of gathering that could draw such a huge and distinguished crowd: the opening of a new Louis Vuitton flagship store in Beijing. The French fashion giant is one of the few luxury brands in the world that could afford to spend so much on a store launch.

Louis Vuitton is one of the few luxury brands that can say it definitely profits from the Chinese market. Most other brands are still trying to build their brand images at this point. The company won't provide sales figures, but claims its China operations have been profitable since it first came to the country in 1992.

"All of our new stores in China were profitable immediately after opening, which is rarely seen in other countries," says Yves Carcelle, Louis Vuitton's chairman and chief executive officer (CEO).

With 12 boutiques in 10 cities, the brand intends to open two new stores a year in China, which is the company's third largest market in terms of sales, after Japan and the United States.

"We are committed to invest every time an opportunity arises in this market. We have sent out a team looking at every city in China," Carcelle says. "We look at every city as a potential market."

The company wants to expand to another 10 cities, he adds, including Chongqing, Harbin, Shenyang, Wenzhou, Sanya, Suzhou, Ningbo, Nanjing, Kunming and even Urumqi, the capital of Northwest China's Xinjiang Uygur Autonomous Region.

"Chinese customers like our products because they are creative, high quality, and have a lot of tradition. They like them so we invested more," Carcelle says.

The brand claims its 150-year history represents the evolution of French art. The brand does more than just sell products. It helps to popularize the French lifestyle.

Carcelle likes to refer to the company's leather products as "eternal", because the material, designs and production techniques last forever. Its Monogram signature, which debuted in 1896, is still seen on all Louis Vuitton products, for example.

The company also has ready-to-wear collections, which were launched in the early-1990s. There are already six collections a year.

As an international brand, the company understands the importance of absorbing the cultures of different countries. The brand's design team includes 12 nationalities.

Carcelle says that Louis Vuitton offers a wide range of products in China, so customers with different income levels can afford them. From mall key bags, which are about 2,000 yuan (US$227.27), to 1.6 million yuan (US$198,000) made-to-order gold watches, anyone who loves the brand can find something they like, he says.

Louis Vuitton is also the most popular brand for outbound Chinese travellers, especially those travelling to Hong Kong and Paris.

Due to differences in consumption taxes and duties, prices of Louis Vuitton products are about 10 per cent higher on the mainland than in Hong Kong, and 25 per cent higher than in Europe.

Carcelle believes that even without the price difference, people prefer to buy abroad.

"It is natural human behaviour (to shop when travelling). When you travel, you are in more of a shopping mood. It is a mental duty to shop when you travel, because you have to bring something back for yourself and for your friends."

A Global Refund report suggests that Louis Vuitton, Armani and Zegna are the favourite fashion brands for Chinese tourists. Cartier and Mont Blanc are favourites for accessories. Chinese tourists spend 30 per cent of their shopping budgets when travelling in Europe on fashion, followed by jewellery and watches, then souvenirs, leather products, perfumes and cosmetics, the report says.

Louis Vuitton's presence in China dates back almost a century. In 1907, members of the Peking Expedition lugged Louis Vuitton trunks across the Gobi Dessert, braving temperatures of -35 degree centigrade. Its commercial operations began in 1992, with the opening of its first store in Beijing's Palace Hotel.

Six years later, the brand organized "The China Run," an unprecedented classic car rally from Dalian to Beijing, the largest event ever organized by the brand in China. A total of 50 classic cars from all over the world travelled 1,300-kilometres across the country to finish in Tiananmen Square.

A flagship store was opened in Shanghai in 2004 with the launch of ready-to-wear products.

(China Daily 03/06/2006 page6)