The Price Of Luxury Goods Is Hard To Solve Within 5 Years.

Minister of Commerce

Explore products exported directly to domestic sales

Yao Jian, a spokesman for the Ministry of Commerce, recently pointed out that a survey by the Ministry of Commerce showed that 20 brands of high-end consumer goods, such as watches, bags, clothing, wine and electronic products, were at a premium of 45%, which was 45% higher than that in Hongkong, 51% higher than that in the United States, and 72% higher than that in France.

The price of some international brand luxury goods is higher than that of foreign countries, which has affected the decision makers' judgment of trade balance and aroused the concern of Chinese government departments.

The production of luxury goods in China, and then the export to foreign countries, and then import domestic sales directly pushed up prices.

For this reason, Chen Deming has pointed out that many international famous brand products are produced in China. Why do they sell domestic products after export? This not only increases carbon dioxide emissions, but also increases logistics costs.

Chen Deming believes that it is necessary to explore ways to sell domestic products exported directly to the domestic market.

China has a large number of processing trade made in China, and then shipped abroad. For example, some electronic products and high-end clothing, in accordance with the current processing trade policy, must be exported after processing in China, and can not be sold in the Chinese market, otherwise the tax revenue will be raised.

Analysts pointed out that the position of the Ministry of Commerce has played a key role in solving the problem of domestic sales of processing trade, relieving the international pressure on China's large surpluses and the domestic pressure of "luxury is more expensive than overseas".

Spending tens of billions of dollars on overseas shopping

It is reported that a large number of Chinese tourists will buy goods back overseas.

It is estimated that the amount of overseas purchases by individual individuals in China is about $1000. So many Chinese goods brought back to overseas visitors are not counted in customs statistics, which actually underestimates the scale of China's imports of tens of billions of dollars.

Moreover, with the improvement of domestic consumption level, luxury consumer goods are now becoming ordinary consumer goods, so the formulation of relevant policies and the entire policy system are facing challenges.

According to the data of the National Tourism Administration, the number of domestic tourists in 2010 was 2 billion 100 million, with a total income of about 1 trillion and 100 billion yuan and an expenditure of 524 yuan.

In contrast, China outbound tourism in 2010, 54 million people, tourism costs $48 billion, and the expenditure is about 5800 yuan.

Outbound travel expenditure is 11 times the expenditure of domestic tourists, and 2.5 times of the expenditure of 2300 yuan for inbound tourists.

The main reason for the high consumption of outbound tourists in China is shopping, which is mainly luxury goods such as luggage, leather goods and jewelry.

Wang Jianlin, chairman of the CPPCC National Committee and chairman of Dalian Wanda Group, said in this year's "two sessions" proposal that tourists are flocking to buy luxury goods abroad, mainly because China has imposed high taxes on luxury goods in the import sector, resulting in a huge price difference between similar commodities at home and abroad.

Luxury imports need to pay more than 50% of tax.

On the issue of "luxury is more expensive than overseas", Chen Deming has analyzed three reasons: first, there are no customs duties in some overseas markets, such as the zero tariff policy in Hongkong; two, the distribution system of high-end consumer goods has just been established in the mainland, with many levels and large expenses, which has increased the paction costs of high-end consumer goods in the mainland. Three, after the financial crisis, overseas products are discounted and depreciate in order to promote consumption in their countries and regions.

The three main reasons for Yao Jian's analysis by the Ministry of Commerce spokesman are slightly different from those of Chen Deming.

He thinks, first, the distribution system and pricing system of pnational corporations are different; two, there are relatively few domestic brands and few consumers choose; three, the comprehensive import tax rate of some brands is relatively high, including tariff and consumption tax.

It is understood that the comprehensive tax burden of imported high-end consumer goods is relatively high in China.

Take imported cosmetics as an example, three import duties, consumption tax and value-added tax are required.

The import tariff will vary from 6.5% to 18%, the value added tax is 17%, the consumption tax is 30%, and the total tax is more than 50%.

Conspicuous consumption pushes up the price of luxury goods

In addition, the price of domestic luxury goods is upside down, because the consumption of luxury goods in China is still at the initial stage, that is, the stage of showing off. The consumption of luxury goods is simply identified as a symbol of status and status, and has not yet reached the stage of appreciation and experience.

This has prompted foreign luxury companies to discriminate pricing, thereby pushing up the price of luxury goods in China.

The so-called "conspicuous consumption" refers to the rich upper class showing and displaying their financial, financial and social status, as well as the glory, prestige, and reputation of others through the wasteful, extravagant and extravagant waste necessary for the utility and survival of the goods.

The average level of luxury consumption in the world is about 4% of its wealth. In China, it is not uncommon to use "40% or even more" to "ask for pain". This is the concept of irrational consumption.

China's current luxury show seems to be deliberately cultivating this irrational soil.

Although it is far from the stage of luxury consumption, China is precisely the fastest growing country in global luxury consumption.

There are many factors, and the promotion of public opinion is a very important reason.

In addition, the high cost of commercial rents in the first tier cities in China is also one of the factors that lead to higher price of luxury goods.

Rationalization of tax system to solve the upside down of luxury goods prices

In view of the upside down price of luxury goods, Chen Deming said that China will vigorously cultivate the main body of market competition, including cultivating high-end and excellent consumer goods brands to promote market competition.

In the aspect of improving the logistics distribution system, our country is formulating the "12th Five-Year" business logistics plan, giving full play to the role of the third party logistics and reducing the paction cost of commodity circulation.

In addition, China will also pform and innovate the retail mode.

Chen Deming said that China will introduce preferential policies to lighten the burden of retail enterprises.

Yao Jian suggested that comprehensive measures should be taken, including further creation of China's distribution and operation environment for foreign invested enterprises; reasonable price positioning and sales strategies for multinational corporations and retail companies to the Chinese market; and the Ministry of Commerce, together with the General Administration of customs and the tax department, should improve the domestic sales policy of processing trade products.

It is one of the comprehensive countermeasures of the Ministry of Commerce to solve this problem step by step through the further rationalization of the tax system.

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In fact, as early as 2009, the Ministry of Commerce was studying the issue of reducing the tax rate of some luxury goods in order to keep the huge consumption of luxury goods in domestic demand.

Insiders pointed out that lowering tariffs alone can not reduce the price of luxury goods, and can not really solve the problem of upside down prices of luxury goods. It is also necessary to form a rational view of the consumption concept of luxury goods and avoid discriminatory pricing by manufacturers.

Set up enough profit margin in China

For many customers who often buy luxury goods, the annual price increase of luxury goods is almost an "iron rule".

After raising the price of some products in July last year, the big LV (Louis Weedon) started a new round of price adjustment again from April 1st.

And Dior, Celine and other brands have also recently increased the price of some goods in the range of 5%-15%.

It is reported that Chanel (Chanel) Shanghai store has also started raising the price of Chanel wrist watch series since April 1st. The increase is estimated at around 7%, Chanel handbags will also increase by 5%-18%, and some handbags even rise by 20%.

Shenzhen Louis Weedon (LV) flagship store has increased its price across the board since March 1st, with an average increase of about 5% nationwide, with some products gaining slightly more than the average increase.

Insiders pointed out that the price increase of luxury goods business in China is premeditated. In the future, the luxury group will fight for China, and the appreciation of the renminbi is expected. The Ministry of Commerce has also proposed that the difference between the domestic and overseas prices of luxury goods should be reduced in the future. In order to reserve enough profit space for the future, luxury goods manufacturers will have or have already made "premeditated" price rise in China.

According to analysis, the price increase of luxury goods is more of a price strategy, in order to improve and consolidate its own high-end brand image and value.

Under the influence of exchange rate changes, inflation and other factors, if the luxury goods do not rise in price, it means depreciation, so that the luxury goods business will lose many fixed consumers.

Industry experts pointed out that from the cost estimates, luxury brands should not be the most expensive, their profit margins are very high, basically three points cost seven points profit.

Price reversal is not just a luxury.

Insiders pointed out that although the wish of the Ministry of commerce is good, it is not the wishful thinking of the Ministry of Commerce. It involves many ministries and commissions. Other ministries and commissions will not recognize the idea of the Ministry of Commerce from their own interests.

In addition, although some luxury brands are abolished the agency system, this is only a small part. Most luxury goods still rely on agency system.

China's market is so large, especially in the three or four tier cities, no agent's operation is difficult to develop.

Therefore, the price upside down problem of luxury goods is hard to solve in the past 5 years.

The industry pointed out that in fact, in China is not only luxury prices upside down. At present, most commodities in mainland China have been more expensive than the United States, gasoline and commercial housing prices are higher than that in the United States, and durable goods such as automobiles are also more expensive than the United States.

More frightening is that vegetables, fruits and other consumer goods prices directly to the United States, part of it is already expensive in the United States.

Therefore, it is more urgent than the price of luxury goods to solve the problem of daily consumer goods and the price of durable goods such as automobiles and housing.

The production cost of China's high prices is not high, and the abnormal high price to the terminal retail market is mainly due to higher circulation costs.

In the circulation cost, the government dominated the road toll and all kinds of high fees. The products of state monopoly enterprises such as high oil prices are the main drivers of high prices in mainland China.

The key is whether the government has the courage to take the lead of its own, which is higher than road fees, high fees and high prices of state monopoly enterprises.