Why Is The Price Of Luxury Rising All The Way?

If 7 years ago, you had the courage and the eye to buy the "LADYDIOR" bag, you must be better than others.

Earn more.

Because 7 years later, its price has surged from 14 thousand yuan to 32 thousand yuan.

However, after the price increase of 12%, Dior's "LADYDIOR" leather bag is still in the hot market of "not necessarily goods".

The question of price increase has become an unwritten rule in the industry. The price is adjusted one or two times a year, and the increase is about 3%-5% each time. This is what seems to be a small step forward, making luxury goods a reliable investment product.

But this year's rise seems to be less common.

In the past, the price of luxury goods was concentrated in 7 and August, but most of them were advanced to April this year. LV took the lead in promoting the price increase on the Internet.

In October, the price of French official website of LV was also raised on the whole. The range was large and small, and the scale was differentiated according to the different styles and limited edition. However, prices in South Korea, China and Hongkong had not changed.

Subsequently, the price surge was more ferocious, and Chanel, CELINE, Gucci and so on increased their prices. Even Estee Lauder recently followed up the price, and the highest price reached 20%.

"In general, luxury brands focus on collective price increases in July and August, but this year's price rise has come earlier."

Zhou Ting, a luxury goods research expert, said luxury goods were more expensive to ensure their high-end status in the industry and consumers.

This means that luxury brands decide whether to raise prices according to market demand and sales volume.

Moreover, according to the different types of goods, the price increases are relatively high.

In fact, luxury.

The markup also played a positive effect.

According to many luxury brand salesmen, although the price has improved, most commodities are still in short supply.

Depreciation of the euro

Data show that European luxury goods have suffered "devaluation" in succession. The price strategy of European luxury group is very clear, that is, with the development of society, the brand's high value image has been retained. Once there are any factors that affect the luxury brand image shrinkage, it will lead to a rise in the price of luxury goods.

If the price is not adjusted in time, it may lead to the tragic situation of Pierre Cardin and Montagut, and become an ordinary brand, and its image value is plummeting.

China has become a big consumer of luxury goods. Under the background of the global market downturn, many luxury goods regard the Chinese market as "savior".

According to the relevant statistics, China's active luxury goods users buy up to 13 million annually.

But because domestic luxury goods prices are about 40% higher than that in the European market, many customers are spending abroad.

Fat water certainly does not want to flow to the outsiders.

Over the past two years, the issue of reducing import tariffs on luxury goods has become a hot topic in an attempt to reduce the high price of luxury goods in China.

The industry has predicted that if the import tariff is fixed down, the amplitude will reach 15%, and cosmetics, tobacco and alcohol will be the first to cut prices.

If the import tariff is reduced by 2% to 15%, the price of the terminal market will reach a maximum decline of 12%.

And this idea seems to have not been recognized by customs experts. Some experts even believe that as long as the domestic pursuit of foreign luxury goods is not reduced, tariffs will be reduced to 0, and the price of luxury goods will not be low.

An industry insider once said: "the pricing of luxury brands is based on market regulation, and this regulation is based on the purchasing power of consumers in different markets.

Generally divided into three markets: the European market, the Chinese market and the North American market.

Among them, the Asian market has the highest price, especially in China, because the Chinese market is large and the purchasing power is strong.

For the crazily rising prices, the World Luxury Association has released the global pricing formula for luxury brands, taking leather goods, clothing, bags and other consumer products as examples (excluding jewelry, watches, cosmetics and fragrances), and the pricing of the Chinese market is:

Raw material 5%+ processing cost 10% (including design, finished products processing, pportation) + profit retention rate 45% (brand pricing and annual price increase) + advertising and public relations activities cost 8% (year) + exclusive store annual development cost 6% (including commercial convenience) + human resources team cost 10% (annual) + import tariff, consumption tax, partial value-added tax and other comprehensive tax rate 16%= average retail price in China.

In contrast to this

The price of raw materials in the market and the North American market is 5%, but the profit retention rate is 20% and 30% respectively, which is lower than the 45% profit margin in China.

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Throughout the development of luxury goods, rising prices undoubtedly become the most important marketing strategy.

But for different brands, the strategy of price rise will be slightly different.

On the whole, the frequency of Chanel bag's rise in price gradually decreases, because the products of its bag class change little, and consumers will produce aesthetic fatigue.

However, CELINE, who came from behind, rose fiercely. "CELINE's mini model smiley face bag was only 11 thousand yuan when it was just listed. In just a few years, it has skyrocketed to the current nearly 18 thousand yuan. It has been our burst money, and it will take 3-6 months to arrive."

A luxury salesperson said so.

The reason is that as a rookie brand, popularity and reputation continue to climb, and more and more consumers are favored and recognized, and the increase is not surprising.

Price and

It is directly proportional to the common sense of economics, but this seems to be too normal in the luxury industry.

Even a lot of luxury goods practitioners are surprised at this "more and more buy" luxury circle.

"Consumers purchase luxury goods is more of a spiritual need.

If you lower the price of your necessities, you can attract people's attention. But if the price of luxury goods is too low, no one will be interested. For those who buy luxury goods, they will be able to buy products before the price rises. "

A brand seller said.

European luxury price increases inhibit Chinese people's enthusiasm for shopping abroad

Luxury magnates plan to raise the European market price to narrow the price gap with the Chinese market and increase consumption in China's domestic market.

Prada and other luxury companies may have more moves.

A spokesman for Prada said that if the euro continued to be weak, in order to reduce the price gap with China, we might consider raising the price of products in Europe by up to 10%. Of course, we will not raise prices in the mainland of China.

The luxury giant Lu Wei MOH Xuan group said recently that its business in China has been affected due to a record high price difference at home and abroad.

Although the group's chief financial officer, jilny Jones, did not say that it would raise the price of the company's products in the European market, he emphasized several factors that would affect the group's price decision.

In a telephone conference with analysts, Guilloni said, "we will take all measures that are most conducive to Lu Wei Ming Xuan's profits."

Lu Wei Ming Xuan refused to give details.

The luxury industry is trying every possible way to solve one problem, one of the most important business growth points in China's industry.

The weakness of the euro, plus China's high tariffs on luxury goods, has led to a huge gap in the prices of luxury goods between the mainland and overseas.

If the price of luxury goods in European market increases, the price difference between China and the mainland will be narrowed.

The price of the same luxury goods abroad is generally 40% lower than that in the mainland of China, mainly because China has imposed high tariffs on imported luxury goods.

China's outbound travel business has been booming in recent years, partly because Chinese are attracted by overseas luxury goods.

According to statistics from overseas travel shopping service company global blue Union, Chinese people spend nearly 11 thousand euros on outbound shopping trips in places like Europe, Singapore and Hongkong.

Luxury companies have invested heavily in expanding their business in China, so they want to get paid. But Chinese consumers do not spend their time in the nearest luxury stores. Instead, they are shopping overseas.

The reason is very simple.

One of Louis Weedon's most representative accessories, Speedy 30, which sells well, is priced at 6100 yuan (964 US dollars) in Beijing and Shanghai, while the euro sells for 500 euros (about 619 dollars).

Similarly, the retail price of Chanel handbag Timeless Classic Flap is 3100 euros (3839 US dollars) in France, while the same product has been sold to 37 thousand yuan (about 5850 US dollars) in the mainland of China.

In recent months, with the fall of the euro against the US dollar and the RMB, the price difference of these luxury goods has widened further.

Since the beginning of last year, the euro has fallen by about 15% against the US dollar, while the euro has fallen by nearly 16% against the dollar.

Tradition Securities and Futures S.A. analyst Gallot said the price gap is getting bigger and unreasonable, and enterprises need to react quickly.

Brokerage firm CLSA Asia Pacific market analyst Yu Yale said that Chinese consumers are likely to continue to shop abroad because the price increase of luxury goods in Europe is unlikely to exceed 5% to 10%.

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However, they may reduce the amount of purchase.

One morning, Alison Jiang was in the morning.

Outside the Chanel store in the famous department store, she said she plans to make the best use of her first trip to Europe to buy some designer works at a low price.

But the Chinese lady said that if European luxury goods rose in price, she would definitely reduce the purchase expenses.

Domestic luxury market slowdown is still the main theme.

Burberry issued a profit warning, which surprised the whole market.

Recently, Burberry (Burberry) announced the recent retail situation. Its sales figures are the worst since the financial crisis. Some analysts believe that the growth of Asia Pacific demand based on China is not as rapid as before. The euro zone turbulence and other reasons have caused the market to worry about the development of the luxury goods industry.

The earnings data released by several luxury listed companies show that their sales growth in China has declined significantly.

Some agencies even judged that about 30% of the Chinese tycoons would reduce their spending on luxury goods.

Burberry group said in a statement that the group's store opened for more than a year, and sales increased by zero in the 10 week ending September 8th.

This is far below the same store sales growth of 6% in the first quarter ended June 30th.

Burberry group later said that the company's annual profit forecast may be at the bottom of the market forecast.

According to reports, Burberry financial controller Stacy Cartwrigh (Stacey Cartwright) said: "we know that we are not the only ones affected."

She also said that other brands with a long history of "time-honored brands" were also affected.

The comments were seen as an ominous sign of the luxury industry and caused a strong reaction from the luxury goods industry. PPR, Louis Weedon and Switzerland were all hit by a sharp fall in share prices.

In fact, Prada's earnings report shows that its market share in China has declined by 25% over its 12 month high.

In addition, the market share of LV and Tiffany has declined in recent years in China.

Watch industry also showed signs of weakening demand.

According to the introduction, Switzerland's peak group watches and jewellery brand Cartire CEO fu na has recently revealed that China's demand for high-end Cartire watches is slowing down.

China's largest list retailer Hendry Holdings Limited has also revealed that the demand for high-end watches has slowed to single digits in recent months.

Why does the price rise every year? On the one hand, the data of the luxury brands are weak and the demand is weak. On the other hand, the luxury brands have not slowed down their preparatory price increase.

Insiders say that mid year discount is an episode of luxury marketing, and rising prices and expanding new stores are the main theme of brand development.

Italy luxury goods company Giorgio Armani (Giorgio Armani SpA) announced in June this year that it will add 100 more on the basis of 289 stores in mainland China.

Germany's Hugo Boss AG said in May this year that it will have nearly 150 stores in mainland China in the next three years.

A luxury buyer revealed: "the price of luxury goods has been an annual example. The key is to see the different price points of each price increase.

Besides, how to maintain the brand status and marketing strategy of luxury goods without increasing prices?

But there are also

People questioned, if the price increases and discounts at the same time, this is actually only one of the means of brand game, but is the consumer really willing to pay for it?