Paris Perspective #19: Why luxury is the doyen of geopolitics - Bruno Lavagna
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High-end goods are more than fancy purses and jewellery. They're a powerful diplomatic tool and an instrument of soft power that contributes to the international reach of world powers. With France's "great houses" leading the aristocracy of luxury, Paris Perspective looks into the actions and strategies employed by luxury brands in promoting their countries of origin.
From time immemorial, the use of luxury goods in diplomacy has been an essential part of relationship and nation building.
Be it vassal kings paying tribute to their feudal overlords, or impressing guests at a political fundraiser with champagne and caviar, luxury has been an essential tool in winning over adversaries and flattering allies.
In this era of globalisation, the political power of luxury has geopolitical repercussions. Brands that constitute the essence of luxury have been resilient to crises through the decades and centuries.
More recently – between the 2008 global economic collapse to the 2020 Covid-19 pandemic – luxury goods have taken a short term hit, but almost instantly rebounded to pre-crisis levels of consumption.
This is because luxury is not just a tangible extravagance, but also a state of mind, says Bruno Lavagna, a consultant who specialises in the geostrategy of luxury.
"One of the main characteristics of luxury is that whether we are confronted by climate change, wars, natural catastrophes – luxury is always there whether you are rich or poor," Lavagna said.
Everyone needs luxury he adds. "After a crisis, after a pandemic, after a war, you will go back to luxury – whatever that might be."
It might take the form of an item from a fancy brand, or a dream to be realised.
'Ambassadors' and the diplomatic lexicon
And it's through this quest for a dream within the so-called “great houses” like Louis Vuitton and Chanel, that a lexicon has emerged rich in diplomatic vocabulary.
Luxury “ambassadors” are appointed, representing the "national spirit" of a brand, expanding a country's international reach through a luxury commodity. As such, the use of diplomatic jargon is hardly a coincidence.
"Not at all," says Lavagna, who is also the founding director of the Be.Exclusive consultancy in Monaco.
"Beginning with my own story. I've been working in the luxury businesses for more than 35 years. And I have very [specific] geographic and historical roots, speaking English, German, Italian, of course, and French.
"When you travel, when you go abroad, you need to discover, you need to understand. As luxury is a global phenomenon, the diplomatic echoes resonate within it."
Champagne Vs Shampanskoye?
By 2021, Asia has become the epicentre of the luxury market, with China accounting for 40 percent of the world's 450 million global luxury consumers.
But as Beijing seeks to dominate the new silk routes under its colossal Belt and Road project, important questions are raised.
Have the “great houses” questioned the authoritarian approach of leader Xi Jinping?
Do the affluent brands of status and style offer any response to rights abuses in Xinjiang, military expansionism in the South China Sea or the contentious status of Taiwan?
Perhaps the Chinese market is too important to the "purveyors of dreams" to rock the political boat.
"Don't forget that there are 1.4 billion Chinese living in a world of seven billion people," Lavagna says. "That means China will be everywhere."
Even during the pandemic when the Chinese market was closed, they still bought luxury goods because there was a hunger and desire to buy.
Yet, when it comes to the politics of Beijing, it would appear the big brands are resigned.
"Back to the attitude of human beings. We are very selfish and very proud. So, each people, each nation wants to show off and sell."
And China is the factory of the world.
The rise of China as the world's largest consumer of luxury goods has been good for France, which remains the leader in luxury brands.
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The 'French Touch'
French companies account for six of the top 10 “houses” with Louis Vuitton at No.1, valued at €47.2 billion, followed by Chanel at €37 billion.
Italy’s Prada at No.10 is a "lowly" €3.5billion.
Lavagna explains why the “French Touch” has resonated so persistently across the globe.
"French history is so strong, so powerful that to be proud of our French identity, years ago the French government promoted the savoir faire, le talent in different areas. Architecture, Chateau de Versailles, Louvre, the way of eating – gourmet – champagne, drinking … So everything."
In fact, it all goes back to the Sun King, Louis XIV, whose expansion of the Chateau de Versailles under the financial guidance of Jean-Baptiste Colbert established the economic model of importing cheap raw materials, and converting them into coveted, luxury items through French savoir faire.
Fast forward 350 years – from the Sun King's reign to the G7 meeting of world leaders – and host French President Emmanuel Macron in Biarritz used the gathering of the world's most powerful players as an opportunity to showcase French produce and know-how.
Lavagna believes this national grandstanding of opulence and "art de vivre" become the norm when nations host the G7 gatherings, adding that Macron's move to hold the G7 in the Basque resort town of Biarritz was very clever.
"We don't always need to put Paris or Versailles in the spotlight. It could have been another city [other than Biarritz] but it's a part of French history ... it showed that France has a very different landscape," he says.
Reinventing luxury amid climate change
When it comes to the gatherings of the "great and good", protests on the inequities of the modern world are sure to follow to highlight the impact of climate change, environmental degradation and collapsing biodiversity.
With these challenges at the fore of modern political debate, what lies ahead for the use of luxury as a geopolitical tool? How have the “great houses” adapted to the next generation’s demand for sustainability and ethical production?
Critics maintain that any moves by high-end brands to move towards carbon neutrality or reduce environmental impact has been done in the name of upholding the image of luxury brands.
Lavagna remains sanguine on the issue. "You try, right?" Yet the success of brands can also hold them to ransom.
"It's what's called mass prestige," says Lavagna. "If you're successful, you produce more, you sell more. But in the end, everybody has the same items, so it's no longer a luxury."
The next generation
In the future, luxury brands have to be very clever, show restraint and get back to their roots.
"Luxury is not perfect, nobody's perfect. But luxury brands have the money and the power to incite a revolution from the inside," Lavagna says.
"The climate change youth generation is right to ask for a more responsible environment and less of a footprint. But don't forget that luxury brands came from nature when the maitre d'art transformed [raw materials] into food, clothes or fragrances.
"So it's time to get back to nature."
Written, produced & presented by David Coffey
Recorded, mixed and edited by Cécile Pompeani and Nicolas Doreau
Paris Perspective #19 - The geopolitics of luxury - Bruno Lavagna
Bruno Lavagna is a consultant in luxury geostrategy and the founding director of 'Be.Exclusive' based in Monaco.
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