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Luxury Domestic Agent: Small Risk, Lucrative Stability

2010/9/1 15:32:00 109

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International Analysis

luxury brand

The pros and cons of domestic agents or direct battalions should first clarify the difference between their interests. The former seeks the maximization of short-term profits, while the latter pursues the maximization of clothing brand image and profits on this basis.

Domestic agent: small risks, high profits and stability. Agents know more about the Chinese market, and have sales channels and passages.

When you enter the Chinese market in the early years, you rely on agents as expedient measures.

Before 2004, China's market laws and regulations were limited, and the market prospect was unknown, so most brands chose to shift risks.

The first batch of large scale private foreign trade companies have become the leading force of luxury brands entering the Chinese market.

For luxury brands, the cost is very small, almost zero, and these agents are more familiar with the Chinese market, and some already have ready sales channels.

Disadvantages: in order to save costs, dealers

brand

The image is greatly reduced, and the protection of luxury brands' intellectual property rights can be very limited.

Agents rush to clean up inventory.

clothing

To reduce costs, they are only willing to put their products on their shelves, while luxury brands often have a theme for every season. Every single item presenting the theme will obviously cost more.

In order to save costs, dealers' control of brand image and related services will sometimes be greatly reduced.

When some luxury brands are produced locally, agents will directly get goods from factories. When the sales channels of these agents are too powerful and too close to manufacturers, luxury brands will lose control, which leads to many grey areas.

Luxury brands can do very little for intellectual property protection in China.

Brand direct operation

Li: it helps to maximize the brand image, and domestic demand has been fully stimulated.

China's domestic demand has been fully stimulated, and the main consumer market of luxury goods is no longer the same as that of the former Beijing, Shanghai, Guangdong and three developed provinces. The second tier provincial capitals, such as Chengdu and Wuhan, are also beginning to enter the big view.

Disadvantages: channel cooperation can not be handy, and it is not easy to find suitable shops.

The overall direct sale of luxury brands is not easy.

The constraints include not always finding the right store when negotiating with the channel side. The agents may have deeper accumulation because of long-term and channel cooperation.

Luxury brands do not necessarily gain the advantage of negotiating with distributors.