The words “designer handbag” conjure up a certain image: a moneyed Parisian sitting in a 6th arrondissement cafe with a Chanel 2.55, perhaps, or a celebrity striding through Los Angeles airport with a Hermès Birkin.

During the past couple of seasons, however, a new breed of It bag has emerged. It might be golden brown, cobalt blue or fondant fancy pink. It could be adorned with metal rivets or covered with menacing-looking spikes. Whether cross-body, bucket-shaped or a thick-strapped backpack, it is likely to be covered, unashamedly, with a repeated logo: a laurel, a diamond and the letters MCM.

If you haven’t heard of MCM, you have probably seen it somewhere. On celebrities ranging from Cristiano Ronaldo to Beyoncé to Rihanna, maybe, or on the backs of fashion students. In general, customers tend to be young: bloggers posing for photographs outside fashion shows, rather than the old guard of editors on the front row.

According to Maude Churchill, an editor on streetwear site highsnobiety, MCM burst on to the scene a few years ago and has since been seen in the hands of the right celebrities and in credible collaborations with designers and artists. “MCM crosses the boundaries of streetwear and high-end fashion,” she says. “It’s luxurious but kitsch.”

Youth-sweeping trends are nothing new, but MCM’s ubiquity is surprising given that its prices veer so far beyond student-loan territory – think £380 for a small messenger bag, £530 for a roomier tote and, at the top of the line, £1,735 or even £3,135 for a limited edition snakeskin backpack. Beyond in-the-know fashion and streetwear circles, most UK consumers are unfamiliar with the brand. This is a tricky proposition in luxury leather goods, a market built on heritage; whether it’s Louis Vuitton equipping the maharajas with travelling trunks in the 1920s or Grace Kelly using Hermès bags as a shield from paparazzi in the 1950s, history and narrative are everything.

In fact, MCM does have a story – and a compelling one at that. The company was founded in 1976 in Germany, named after its founder as Michael Cromer München. With a hint of Louis Vuitton about its repetitive patterns, the bags were popular in the 1980s, when Diana Ross used its suitcases on tour, while trunks were carried by obsequious porters on Dynasty as a signifier of wealth and success. By the 1990s, MCM had more than 250 stores across the world and its advertising campaigns, shot by Herb Ritts, featured Cindy Crawford naked but for an MCM bag. In the noughties, however, the business floundered, becoming mired in financial problems. Its founder was investigated for alleged tax evasion, fakes flooded the market and the brand’s designs lost their appeal. For more than a decade, MCM was barely mentioned in western fashion circles at all.

MCM’s salvation came from South Korea, one of the few places it had remained prominent, when the company that had licensed the brand – Sungjoo Group – acquired the business in 2005. Then, MCM’s global sales stood at $100m (£60m). After changing the name (it is now known as Modern Creation München) and hiring Adidas global creative director Michael Michalsky to create sporty, dynamic, youthful designs, it boomed. In 2011 sales were reported as $400m; by 2013, $500m. This year, sales are forecast to hit $650m, with the company considering a stock market launch and projecting sales of $1.5bn within three or four years. Asia is the main market, by quite some stretch – China, Korea and Japan each contribute almost a third of MCM’s revenue – but Europe is ripe for expansion, as the opening of a dedicated 105 sq m MCM boutique at Harrods last month, and a planned opening in Bond Street next year, attest.

According to the company’s winningly titled chief visionary officer, Sung Joo Kim, its success so far has hinged on the understanding of major developments in the luxury market. First, she says, millennials “are born with computers, so they have a completely different approach to life and expect brands to be interactive and luxury to be functional”. The rarefied world of traditional high-end stores “like temples, one-sided and arrogant – come and worship!” holds little appeal. Second, she says, “today, without exception, more than 60 or 70% of [luxury brands’] revenue is generated by the Asian market, or by those people who travel around the world. And in Asia the young generation, not the established older generation, are the movers and shakers.” She calls these customers “21st-century global nomads” and says they do not, always, have a high income, although their parents might; but often they will save up for a piece of MCM – a new kind of luxury.

Kim believes the success of the company’s rucksacks backs up her theory about the new “global nomad” consumer. “It’s ironic that a handbag business is [selling so many] hands-free bags,” she says, “but it makes sense from a socio-economic view. The backpack is practical and mobile.” It is also unisex, a crucial element; in China, for example, one of the first markets to embrace MCM backpacks, “more men are buying luxury than women”.

Still, Kim does not see the brand as South Korean or Asian, but as resolutely German. She points out that design and production are mainly run from Germany and Italy, and that many other brands perceived as European – from Mulberry to Escada – happen to be owned by Asian companies. “All the major brands may have some Asian elements coming in, even Chanel, especially Gucci, with gold, crystals, white and colour. They know their growing customers are rich Asians and Russians,” she says; designs are becoming more globalised.

If anything, she says, MCM is “a global baby incubated out of a Korean cradle”. Which, as a narrative goes, is incredibly 21st century.