Prada Listing &Nbsp In Hong Kong; Quality Questioned Frequently

Italy's famous luxury that has just been listed in Hongkong and wants to exert its strength in the Chinese market.

In June 24th, Prada was listed on the Hongkong stock exchange, hoping to enhance its visibility in the Greater China region and expand its market.

Recently, the famous international luxury brands have come to Hongkong for listing.

The importance of the Chinese market for Prada can be seen from its prospectus.

Sales in Greater China account for 19% of the world's total.

By contrast, the growth rate of Prada in Italy is only 1%, while that in North America is only 0.8%.

Over the past three years, the annual growth rate of Prada sales in the Asia Pacific region is 51%. The prospect is unlimited, which is mainly driven by the Chinese market.

Its annual sales growth in the Greater China region is as high as 52%.

Just as Prada wants to exert power in the Chinese market, its products are frequently complained. When Chinese consumers gradually become luxury brands "cash machines", who will guarantee the interests of consumers? Who will supervise the luxury brands?

The source of frequent doubts about products

Lily Qim bought a Prada leather bag in Frankfurt, Germany in May 30th this year. After returning to China in June, she used a famous brand of leather brightening agent to wipe the surface of her bag. The unexpected thing was that the package of bright yellow sheep's cortex began to fade away after being wiped.

"I haven't used this bag yet."

Lily Qim told reporters, "this leather brightening agent I have been used to wipe all kinds of leather goods, including other brand name bags, there has never been any problem."

The reporter consulted the staff of Prada, and the other side said, "our bags are not to be cleaned with our own leather cleaning agent. We need to send them to a special leather bag maintenance center."

"A leather bag worth 1100 euros, leather polishing agent gently wipe it will be serious discoloration, how can it be justified?" Lily Qim angrily told reporters, "this explanation is somewhat fetched."

The relevant person in charge of the leather brightening agent brand told reporters, "we have not seen the package in a specific situation, but personally, I have used more than ten years of this brand of leather brightening agent, and I have not encountered such a serious situation."

In fact, in Prada, disputes like quality problems have been common, especially about discoloration and attrition.

Earlier, the media broke the news, Zhejiang Ruian business and Consumer Protection Commission jointly launched the brand clothing quality sampling inspection, in the sampling of 73 batches of clothing, the pass rate is only 50%.

Among them, the unqualified products include Prada's first-rate luxury brand.

The commerce and industry department ordered the disqualified products to stop selling at the time.

"Domestic luxury goods are mostly domestic OEM. The quality is usually not necessarily better than that of a product.

This is definitely not directly proportional to the price. "

A luxury industry veteran practitioners told reporters.

Media has pointed out earlier that Prada 80% products are domestic OEM, Goldman Sachs has listed it as a product quality risk factor.

The reason is self-evident - Prada is obviously very optimistic about the Chinese market.

According to its prospectus, Prada has 8 direct outlets in China in January 2007, and has increased to 18 by January 2011. It is estimated that by January 2014, the number of outlets will increase to 30.

"China's sustained economic growth will help us further penetrate more Chinese cities."

In order to seize the share of emerging markets represented by Asia as soon as possible, Prada has recently accelerated the pace of opening stores in Asian markets.

According to reports, Prada has 319 directly operated stores in the last fiscal year, including the Prada super flagship store and 18 discount stores located in New York, Losangeles and Tokyo, and plans to open 80 Direct stores in the financial year January 31, 2012, of which about 25 will be located in the Asia Pacific region.

Strong growth performance

As early as October 2010, the media came to the news that Prada plans to go public in Hongkong. This is the fifth time in 10 years that it will be listed on the agenda. Prada's latest attempt was in 2008, when the global financial crisis made its listing plan come to naught.

According to the Prada prospectus, the listed business in Hongkong mainly includes leather goods, garments, shoes and glasses and perfume provided by the Prada agreement and Miu Miu, as well as Church's s and Car Shoe brand targeting small niche shoe market.

Prospectus also shows that from 2009 to 2011, the overall sales share of Prada in the Asia Pacific region has increased year by year, while in Europe and the United States it has been declining year after year.

To this end, the establishment of a direct network in the Asian market has become the investment focus of Prada in 2011.

At the beginning of 2009, the contribution rate of the Asia Pacific region was the lowest in the three regions of Europe and Asia, not even the contribution rate of Italy.

But only two years later, Asia Pacific accounted for 32% of the Prada sales in the Asia Pacific region, while China's performance was even more prominent, accounting for 19%, while Japan accounted for 11% of the total.

According to public information, Prada group now has Prada, Jil Sander, Church 's, Helmut Lang, Genny and Car Shoe and other prestigious international brands, and it also has the exclusive license of the brand.

Prada6 24 was listed on the HKEx.

As of the latest news from our correspondent, the latest news from Hong Kong media is that Prada expects to raise funds by 30% compared to the expected $2 billion, up to 2 billion 600 million US dollars, equivalent to HK $20 billion 300 million.

Burberry and LVMH have been left behind, with a market value of more than HK $100 billion.

This has nothing to do with the impressive sales performance of Prada last year.

According to the Prada prospectus, Prada operating income reached 2 billion 50 million euros in the 2010 fiscal year as of January 31st this year, and net profit rose 150%, up to 250 million euros.

Sales exceeded 2 billion euros, an increase of 31.1 percentage points over the same period last year.

From the market perspective, apart from the incentives for the recovery of European and American market economies, the driving force of strong demand in the Asian market is becoming an increasingly important factor.

Luxury brand "ATM"

"In 2010, the total sales volume of the global luxury goods industry was 172 billion euros, an overall growth of 12%, more than 170 billion euros in 2007 before the financial crisis."

A ltagam m a of Italy luxury goods association predicts that the global luxury market will grow to more than 214 billion euros by the end of 2014.

According to Goldman Sachs report, China's luxury consumption in 2010 was as high as 6 billion 500 million US dollars, the first global growth rate for three consecutive years.

According to a forecast issued by CLSA in France, by 2020, China will buy nearly 170 billion euros worth of luxury goods around the world, and 44% of the world's luxury goods will be bought by Chinese people, surpassing the United States as the world's largest luxury market.

Among them, the Asian market has been a huge engine for the growth of the luxury group in the past two years. Bain Consulting's China luxury market survey 2010 showed that luxury goods suppliers took 68 billion 400 million yuan from the Chinese Pocket last year.

In 2010, China's GDP grew by 10.3% last year, and has maintained two digit economic growth for many years.

The number of 1 billion yuan users increased from 24 in 2000 to 1363 in 2010, with an average annual increase of 50%. The average Chinese customer of luxury goods is 15 years younger than foreign customers.

With the rise of the upstart class, the middle class is growing and consumer demand is escalated. The luxury goods represented by Prada in China are growing continuously.

Luxury goods have also become consumer goods of the middle class from the exclusive consumer products that few elite owned in the past.

The increasing number of tourists and the new rich class have become the main driving force of profit growth.

According to relevant research reports, the Asian market represented by the Chinese market has almost become a "cash machine" for luxury brands. The Chinese Academy of social sciences has recently published the 2011 Chinese and English version of the commercial blue book.

With the increase of middle and high-end consumer groups, China's luxury consumption power will be maintained.

Before 2015, China became the world's largest luxury market.

Huge market potential makes China a new battleground for many luxury brands to compete.

The battlefield has not stopped in the first tier cities, and the "Sunken" development strategy with two or three line cities as the new target has also been included in the development plan of the luxury industry.

Meanwhile, in June 15th, Yao Jian, spokesman of the Ministry of Commerce, said that China would further reduce import tariffs, including tariffs on some medium and high grade commodities.

The most direct result of the reduction in the import tax of luxury goods is the huge consumption of luxury goods in domestic demand, which will further stimulate the development of the domestic luxury goods market.

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Luxury services need upgrading

In sharp contrast to the soaring sales performance of luxury goods, luxury goods in domestic service are mediocre.

Nowadays, the major luxury brands have entered the domestic market. In the future competitive strategy, excellent quality and service will become a breakthrough to enhance the competitiveness of the brand.

However, nowadays, the quality of luxury goods has been repeatedly tortured, and after-sales service is worrying.

Insiders say that how to embody the rights and interests of consumers is becoming a matter of deep consideration.

In the eyes of experts, many consumers regard luxury goods as "absolutely perfect quality" because of the high price of luxury goods.

However, the quality problem was discovered shortly after purchase. In the process of bargaining with merchants, it often takes a lot of time and energy, and the cost of safeguarding rights is too high. In the end, it is often ignored. More consumers, when facing the international luxury brand, are reluctant to investigate.

"The product itself is still important, but today's consumers have begun to focus on" experience ", the courtesy they enjoy in the shopping process, and the after-sale services they receive.

A luxury brand store chief told reporters.

Apart from such complaints, the after-sale service of domestic luxury goods is also disappointing.

In the country, the brand status of luxury goods and its inconsistent services will ultimately restrict its development.

Nowadays, even after being ranked the first tier brand Prada, the after sales service has yet to be improved.

At the beginning of this article, Prada staff also mentioned to reporters that at present, the stores in mainland China only provide maintenance for accessories, and if the quality of the bag itself is in question, maintenance and maintenance may be sent back to abroad. The process may come back to two months.

Relevant data show that since June 2010, 65% of the total consumption of luxury goods in Europe belongs to the Chinese.

The increasingly mature Chinese consumers want to get the after-sale service in China, such as the European and American markets, and even the after-sales service of products purchased overseas.

Therefore, it is particularly important to establish after-sales service facilities in the Chinese market and improve service quality accordingly, providing products for Chinese consumers to buy products not only limited to domestic products.

In the "2010 luxury market research" provided by Bain consulting, it is suggested that building and improving CRM system, managing Chinese customers worldwide is an effective way to deal with the increasingly mature Chinese consumer groups, and providing a globally consistent excellent customer experience is also a sign of the increasingly mature luxury services.