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    Decryption: The Difference Between Chinese And American Luxury Goods Is More Than Doubled.

    2010/7/30 17:50:00 53

    Luxury Price Difference

      


     

     


    The price difference between China and the United States is more than doubled.


    If we simply look at the prices of the two places, the United States' "cabbage price" really let us vomit blood.

    Some styles.

    Bag

    The price difference between China and the United States is more than doubled, and even after purchasing, the price is cheaper than the domestic price by more than 1/3.

    Lisa, a white-collar foreign company working in Xuhui District, Shanghai, has recently taken a fancy to it.

    Coach

    A brand Tribeca Collage handbag, but by comparing the quotations of Coach's official website and the price of Coach store in Xujiahui port Hui square, she found that the "Shanghai port exchange" of this package was more than twice as expensive as the US official website price.


    Lisa also found that the biggest difference between Coach's official website and China's official website is a leopard print large Claire bag. The official website price of China's official website is 15100 yuan, and the US official website price is $1200. According to the exchange rate of 1:6.8, it is equivalent to 8160 yuan, and the difference is 6940 yuan.

    While the TribecaCollage handbag that Lisa sees, the Chinese official website price is 7500 yuan, the US official website price is 498 dollars, the price difference is 4114 yuan.


      


     

     


    Coach many packages are "Made in China".


    This makes Lisa very puzzled: I heard that many Coach packages are also "Made in China", so why is China's price more expensive than the US?


    In fact, not only Coach, Prada,

    LV

    International famous luxury brands such as Armani, Gucci, Vivienne Westwood, Ferragamo and Burberry are also priced at least 1/3 higher in China than in the US.


    "Although Coach is manufactured in China, the foundry factory responsible for production certainly has no pricing power."

    Zhu Mingxia, director of the luxury research center of Cheung Kei, China foreign trade and economics university, said that in general, American brands or agents decide the price of products in the international market.


      


     

     


    Generally speaking, an American brand or agent decides the price of the product in the international market.


    Coach, a head of Shanghai Jiu Guang Department store, told reporters: "the price of Coach in China is determined by the US head office.

    Coach sold in China is manufactured in China, and accessories are imported from the United States.

    China's price is higher than that of the United States, mainly because these Coach packages are shipped to the United States for inspection after domestic production, and then returned to China by domestic sales.

    So besides the US, the price will be relatively low, and prices will be higher in the mainland, China, Hongkong and Japan.


    A customs official in Shanghai agrees with the above statement.

    He told reporters that such a luxury like Coach package is an important reason for the high price in China.

    "When luxuries are imported, there will be three customs duties, consumption tax and value-added tax. The total amount is about 70%~100%."


    He also told reporters that the value chain of an industry may have seven links, including R & D, procurement, logistics, processing, testing, maintenance and so on.

    American brands generally stay in the country with high added value and low environmental pollution, such as research and development, testing and so on. For example, the processing cost of a package is 5 dollars, and the detection cost may be 10 dollars.

    {page_break}


    Will Coach lose the 70%~100%'s tariff conversion profits in order to get 10 dollars in the inspection fee? The customs believe that luxury goods manufacturers will not change the process because of a single paction for global strategic considerations.

    Equally important is that outsourcing of testing and other links is likely to be under pressure from domestic employment.

    What's more, the tariff of the 70%~100% is added to the importers and eventually pferred to the consumers.


      



     


    LV and other internationally known luxury brands, China's pricing is 1/3 higher than that of the United States.


    In fact, since 2000, Coach has pferred more than 90% of its factories to Asian countries with relatively low labour costs.

    The next year after the pfer, the effect began to appear: the gross margin of Coach's product was 64%, even more than 62% of LV, and then it jumped to 77% in recent years.


    A French luxury wine China Trading Company told reporters that every luxury manufacturer has its own pricing strategy, and it is secret.

    These secret pricing strategies are based on many factors such as social culture, consumption habits and behavioral characteristics of consumer groups in various countries, which have been formed through long-term in-depth investigation. The source said, apart from these factors, luxury manufacturers often need to spend a lot of energy to care about the impact of pricing on consumers' psychology.


    AndreCohen, President of Coach China, has confirmed this.

    In an interview with the media this year, he said that in the survey of Chinese consumers, Coach found that consumers in Beijing were more concerned about their identities. They hoped to highlight their identities by buying and using high-grade brand goods, while consumers in Shanghai paid more attention to taste. They also pursued the famous brand's unique products to make themselves more confident.


    According to a market report from Coach, by 2013, the market for handbags and accessories in mainland China, Hongkong and Macao will probably exceed $2 billion 500 million, which is more than two times the current US $1 billion 200 million.

    In order to gain greater benefits in China, Coach announced in 2008 that it had recovered the retail business of the brand distributor, Junsi group in China, including related assets and its facilities and inventory owned by Chinese shops.

    After recovering the camp, the price of Coach China has not changed, but the profit margin has risen to 77%.


     
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