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Is the new Louis Vuitton shop in Ulaanbaatar the start of a new area in Mongolian Globalisation?
Article published by Chris de Gruben
It could easily be argued that Mongolia was one of the first nations to develop today’s concept of globalization; the free exchange of ideas, products and concepts across borders with few restriction.
The mighty Mongol army not only conquered the better part of the known world but they also embraced and developed the cultures that they came across. Under the Mongols, new technologies, various commodities and ideologies were disseminated and exchanged across Eurasia. Mongols were highly tolerant of most religions, and typically sponsored several at the same time. At the time of Genghis Khan, virtually every religion had found converts in its capital city of Karakorum.
The armies of Chinggis Khaan not only revolutionized strategic warfare but also understood that survival and growth came in the exchange and adaptation of ideas, trade and concepts. The Mongol administration pioneered the use of a fast postal service, the introduction of a writing system and created a fair judicial system. European travelers were often amazed by the organization, freedom of trade and strict discipline of the people within the Mongol Empire.
It is thus ironic that the Mongolian Empire so quickly faded from world view and Mongolia slowly became one of the most isolated and least understood lands in the world until the early 1990’s when the communist system collapsed.
It is now awakening (with a jolt) from that deep commercial slumber and making up time. Over the past 5 years , there has already been tremendous visible change, new shops open every week, restaurants come and go, virtually every product is now available in UB and more arrive all the time. The level and quality of services are improving at a fast rate, a few years ago, a Subway style sandwich shop such as Sub’baatar would have been unthinkable and yet here it is today.
Despite all the criticism Mongolia is getting in the international press, it is one of the only true functioning democracies in Asia, with freedom of speech, a fair judicial system and a rule of law. While there is currently a strong rebirth of the Chinggis Khan cult, forbidden during the soviet period, this is merely a demonstration of the national pride and awareness that is quickly awakening. Mongolia is getting ready to take part in world affairs once more. It is an exciting time to be here, it is a time of intense change.
But where does the average Mongolian nomad fit in this new world order? Have they been left behind? There has of course been heavy urbanization in Mongolia over the recent years, a lot of young urban residents are the first generation of their family to be born or to grow up in the city, it is likely that over the next few years, there will be a growing divide between town and country but it always seem to me that the young Mongolian urbanites never quite forget their roots in the countryside and often go back to it in search of their identity. Mongolians will always be nomads at heart and retain a strong attachement for the countryside, is that enough to sustain it economically?
Even the nomad in the darkest depths of the country is accepting and often embracing his new commercial reality. The price he sells his cashmere, buys his petrol or the taxes he pays are all dictated by international markets and their fluctuations. It is the new path that Mongolia has embarked on and the majority of its population is playing the game of international trade and commerce.
With the “soon to be opening” Louis Vuitton Store in Ulaanbaatar, it is a renewed chapter in its globalization history that Mongolia is opening but I sincerely hope that, in these turbulent times of its history, Mongolia will control how its identity is shifting and changing. Change to Mongolia and its population is inevitable, I only hope that globalization in this case will still be working both ways, Mongolia has much to learn from the world but at the same time the world has much to learn from Mongolia.
The question must also be asked of why is Louis Vuitton in Ulaanbaatar, is there a sufficiently sized market to justify it commercially or is it merely a question of “ethnic branding”, are they planning to launch a Mongolian cashmere range? Or is it merely good PR to be omnipresent and display a retail location in every Asian capital (with the possible exception of Pyongyang).
Furthermore, will this new shop be part of a wave of international chains opening retail locations in Ulaanbaatar? Will it be a catalyst for not only luxury household names but also different brands such as GAP or Banana republik and financial services such as HSBC? Maybe some restauration networks such as Outback Steakhouse or Starbucks coffee will be enticed to come to Mongolia, maybe even big distribution network such as carrefour or Tesco could find sufficient markets to justify starting Mongolian operations.
Already Mongolia has an impressive number of international brands with Adidas, Mercedes Benz, Dior, Esprit, Swarovski, BMW, Landrover, Lavazzia and many more.. A hilton and a Shangri La hotels are scheduled to open in UB in the next few years.
I, for one, look forward to seeing the changed landscape of UB and Mongolia in a few years from now and I will look for Mongolia’s influence in the region and the wider world.
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