Bad timing?

The Louis Vuitton maison, one of 16 similar boutiques in the world, is located in Shanghai's address for luxury goods: the swanky Plaza 66 mall, where rival brands such as Chanel and Prada also have stores.

Spanning four levels and with more than 100 staff, the store is currently the only one in China that offers custom bags and shoes. The company declined to say how much it spent on the boutique.

"Being in this made-to-order market needs sophisticated customers who know what they are talking about and own several bags, if not dozens of bags," Carcelle said.

"That's why the haute maroquinerie and made-to-order-shoes... are important to demonstrate in China," he said, using the French word for luxury leather crafts.

"As long as we didn't have this space to show them to our clients, in a world that is changing fast, we were missing our weapons," he said.

Louis Vuitton's timing, however, may be less than ideal.

Louis Vuitton sunglasses are seen at the largerst Louis Vuitton store in China, which located in Shanghai, July 18, 2012. [Photo/Agencies]

Luxury spending is softening in China as the economy weakens. Economic growth slowed to its lowest level in three years last quarter. Britain's Burberry said last week its sales had been hit by the slowdown in China.

Carcelle declined to comment on the state of the Chinese economy or its impact on luxury spending, but said he sees more "maisons" opening up in the capital Beijing and Hangzhou, a thriving trade hub in eastern China.

He said Chinese consumers had rapidly matured into luxury connoisseurs, and the company needed to cater to both first-time buyers and sophisticated shoppers.

"Maybe in the West, this trend took 20 years but here it takes 5 years from the first purchase to the willingness to have more sophisticated products and services," Carcelle said.