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Four Reasons For The Decline Of Luxury Goods

2013/6/26 11:00:00 65

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according to the latest research launched by an expert from the world's top a href= "http://sjfzxm.com/news/index_f.asp" > luxury goods < /a >, it is estimated that in 2013, global luxury sales growth will be 50% lower than that in 2012.

The main reason lies in China.

According to the relevant statistics of Bain consulting company at the end of last year, the growth rate of luxury consumption in mainland China decreased from 30% in 2011 to 7% in 2012.

sales growth bottleneck and consumer confidence decline. Some experts say, "it is precisely those brands' ambition to pursue profits in China that has led to its decline in China".

this "decline" is not only caused by external factors such as China's economy and market environment, but also from many problems of luxury brands themselves.

strong > 1. Sales growth slows down. Luxury dream in China awakens /p >

recently, a number of foreign luxury brands released the first quarter results in 2013, which showed that amazing sales performance was no longer there and sales growth was only maintained in single digits.

French luxury goods giant < a href= "http://sjfzxm.com/news/index_h.asp" > LVMH < /a > the group's quarterly results show that sales increased by only 6% over the same period last year, compared with 25% in the same period last year.

Hermes's sales growth in the first quarter of this year was only 10.3%, the lowest since 2009, and 2009 is the most severe year in the global recession.

LVMH and GUCCI parent company Kering also expect that this year there will be a marked decline in performance.

in fact, since last year, the Chinese banquet in the luxury industry is coming to an end.

Statistics from Bain consulting show that the growth rate of luxury consumption in mainland China dropped from 30% in 2011 to 7% in 2012, and the change was like roller coaster.

recently, a recent study by the world's top luxury experts showed that global luxury sales growth is expected to be 50% lower than that in 2012.

The main reason for this decline is China.

the Chinese market has been the engine of luxury growth in recent years. Why is it also experiencing a slowdown?

Zhou Ting, Dean of the Institute of wealth and quality, told reporters: "the most important reason is that, from many earnings reports, it can be shown that the most serious decline in consumer performance is often the luxury brand. This shows that after the rapid development and rapid expansion of luxury goods, China has gradually approached the market critical point. On the one hand, they are expanding their brands, and on the other hand, with the improvement of popularity, the brand value is decreasing.

Zhou Ting believes that the consumption concept of Chinese consumers is upgrading. With the maturity of consumer psychology, the psychology of brand consumption (paying attention to LOGO, buying big cards) and premium consumption (willing to pay high prices for luxury goods) is becoming more mature. China's conspicuous consumption psychology is gradually decreasing.

Besides P, Zhou Ting also believes that since 2012, the overall economic situation has slowed down and negative information has emerged in the luxury goods industry.

Including industry, service quality and other negative information, as well as luxury electric business complaints, seriously affected consumer confidence.

Sun Yafei, chief executive officer of Fifth Avenue luxury goods network, told reporters that "China's luxury consumption is understood to be partly for gift giving. After this year, the state has some restrictions on officials accepting gifts or buying luxury goods, especially like last year's" uncle's "storm, which I believe will be influential in the luxury consumption of gift giving.

according to the World Luxury Association's monitoring report on China's first quarter luxury market, before 2013, the gift market accounted for 72% of the total sales of luxury goods in China.

In China, giving gifts to luxury goods has become a mainstream trend, but in the first quarter of 2013, this situation has been broken. Officials are far away from luxury goods as the best way to avoid public opinion calamities. The absence of official market is the main reason for the heavy market share of domestic luxury goods.

two, luxury service: "it seems to be putting on a shelf" /p >

industry insiders told reporters, "some brands are putting on airs in terms of service, and are rather arrogant."

although China has become the largest consumer of luxury goods, luxury goods after-sales service in China is also a luxury.

It can be said that Chinese consumers only pay a high price, but it is hard to match the high quality after-sales service.

many consumers have similar experiences: they bought a big brand handbag or watch at a high price. They always have no maintenance when they encounter damage or need maintenance.

Brand stores also tell consumers in real time that they do not sell free after-sale services.

Consumers spend a lot of money and time on luxury goods.

Sun Yafei told reporters, for example, "buying a problem in a big shop can not be changed by taking it back, but it can only be repaired.

He will tell you that there are some parts missing here, which need to be sent to Europe for repair, and only one or two months later.

During the "315" period of this year, insiders pointed out that most of the European luxury brands' complaints handling standards for consumers in other countries will be resolved in time. Only in the world's most consuming Chinese market, the performance of < a href= "http://sjfzxm.com/news/index_c.asp" > luxury brand < /a > has not been fully satisfied with consumers. The average sales complaints of the same luxury brand in China every year are more than 65% on average than in Europe. "P"

according to the relevant reports, from March 15, 2011 to March 15, 2012, 3756 complaints about luxury brands were received by Chinese consumers.

Of all the complaints, 57% of the complaints about commodity quality, 43% of the complaints about after-sales service, accounted for only 16.2% of the complaints.

"Complaint handling is not timely", "maintenance time is too long" and "maintenance price is too high" has become the "service characteristics" of the overseas luxury brands criticized by consumers in China.

"this will greatly affect consumer confidence and consumer sentiment, and create a" no trust "mentality.

This is the problem that luxury brands have to face in the long run in China. "Zhou Ting thinks that luxury brand terminals are the biggest extension in China, but there is no matching development of service terminals.

Stores can develop to three or four line cities, but the maintenance center does not drive to three or four line cities.

Moreover, there are foundry and complex dealer systems in China. In the production process, the control of product experience and service links is decreasing.

This does not match the high price.

Zhou Ting pointed out to reporters that "we must improve control of service quality and enhance service experience, which must be fundamentally solved."

Otherwise, it will also lead to the loss of consumer groups.

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strong > three, behind the dark: is the luxury brand worthy of high social status? /p >

recently, a chief executive of a luxury foundry factory told reporters, "thousands of thousands of packages have made only two bottles of mineral water, and the profits are as thin as a piece of paper!"

this enterprise has seven or eight brands, such as COACH, PRADA, ARMANI, BURBERRY and so on, with an annual output of 1 million 600 thousand -170 and ten thousand luxury brand packages.

The chief executive of the factory said that the gross profit of a luxury agent would not exceed 10 points.

He said, for example, a 3000 yuan COACH package, which we sold to Hongkong trading company 120 yuan, the cost of 100 yuan, of which 45 yuan for material costs, 20 yuan for artificial costs, 35 yuan for the cost of hydropower and other costs, a package only 20 yuan can be earned.

This is a good situation, sometimes the cost control is not good, a bag is often only 5 yuan RMB, that is, two bottles of mineral water money.

The status quo of the OEM is less than that of the products they produce. Although the workers are working in the world, they may be the world's top and expensive bags, < a href= "http://www.91se91.com/" target= "_blank" > clothes < /a >.

In bad working conditions, workers are making things that they will not buy for the rest of their lives.

These luxury factories have been described as sweatshops more than once.

from December 3rd to December 6th last year, a reporter in a Burberry generation factory "undercover work" found that the working time was 12 hours a day, except the rest time of 10 minutes in the morning and afternoon. The reporter had 11 hours and 40 minutes in real time every day in the inspection section. In the ten hours, he had to deal with piles of handbags, and then packed the big handbags with the workers around.

For journalists who applied for a long time without overtime work, the workers said that unless the pregnant woman applied, it would be impossible not only to apply for success, but also to be dismissed.

Xiao Hong, less than P, said: "if we work 8 hours a day, the monthly salary is only 1340 yuan, which is not enough for life.

I spend money on shopping for good food and shopping for beautiful clothes on weekends. "

these foundries hiding behind luxury goods can only get very little benefit in the whole industry chain. Of course, this is not unique to the luxury goods industry.

"this question reflects whether luxury goods should be high priced."

Zhou Ting told China news weekly net that the cost of luxury goods is higher than that of fast selling products. Of course, the profits of the industry will be relatively high. Some luxury brands will have the layout of the global industrial chain, so they will strictly control costs and maximize profits.

but Zhou Ting told reporters that in the primary market countries, skimming strategy (pursuit of high profits and high pricing) is effective, and it can be effective in the short term, which can bring high profits to enterprises. But with the development of the market, the bubble will gradually decrease as time goes by, and logistics and information flow are gradually developed, coupled with the promotion of consumption concept.

Consumers have realized that there is a gap between the high price and the cost, and are no longer willing to pay the premium.

"the Chinese market is too big and complex. The first tier, second tier, three tier cities, the southern North and the eastern part of the West are different. The market is too complicated and the consumption concept is very different." therefore, luxury brands are not afraid, because he knows that some people are rational and have no taste, but there are still a lot of people to hold me.

Therefore, luxury brands have a sense of reliance in the short term.

But in the long run, this psychological damage is the long-term development of luxury brands themselves.

Zhou Ting said.

four, crazy digging is reduced to "rotten Street" image /p >

"I have two LV handbags. Though they are still very popular, I will never recite them again."

This is a white-collar worker working in a multinational cosmetics company. He sighs with reporters. "I don't think this brand is suitable for me."

In the past few years, LV has been considered as a mass swamp, known as the "street bag", and the Shanzhai products emerge in an endless stream. P is gradually abandoned by the Chinese rich people.

in fact, in the 2012 China luxury report released by the Institute of wealth quality, there is no LV figure in the ten luxury brands that best embody the tastes of consumers.

In the "luxury brand counterfeit visibility list", LV topped the list, but more than 90% of consumers said they would not buy many luxury brands.

however, LV ranks second in the ten luxury brands of "the most expensive new luxury buyers", second only to the top BMW.

It can be seen that although the sales volume of LV is growing, most of it comes from new customers.

"real rich, real millionaires, they will not buy LV or GUCCI, because they are too big."

Lei Xiaoshan, founder and managing director of China Market Research Group (Shaun Rein), said, "rich people are getting richer and richer. They are eager for the exclusive product and their personality."

Less than P, however, the problem of brand popularity is far from LV. Recently, Cartire, known as "the jeweller's emperor, the jewellery merchant", has been accused of becoming the next LV.

This brand is the Royal jeweler of European countries. In the eyes of Chinese consumers, Cartire's three words are high-end representatives.

over the past year, its number of stores in China has decreased by 10.

Even so, Cartire is still the number one international luxury brand shop in China. According to the 2012 China luxury report released by wealth quality, Cartire has 224 stores in China.

Zhou Ting believes that in general, the number of stores reached three digits, is a dangerous signal, brand value has gone down.

Sun Yafei, chief executive officer of Fifth Avenue luxury network, told reporters that the so-called luxury goods should be balanced according to the intensity of population, population size, GDP per capita and disposable income per capita.

"Too many brand stores are open, and the result may be a large group of consumers who do not meet your target positioning to enter the sales range, and will give others a sense of your brand value being reduced."

it is reported that Hugo boss is the only Chinese shop owner behind Cartire and has 142 stores in China.

"It's so popular that you can see Hugo boss in many places.

Besides, there are many brands that are right now.

If we say that there are more than ten cities in a city, it will greatly affect the high-end positioning of the brand, so the number of brand stores must be controlled.

"rare goods are expensive. For luxury goods, not more people have the better." Sun Yafei told China news weekly net that in Europe, top brands such as Hermes and LV will limit the purchase quantity of each foreign passport and can not buy it arbitrarily.

Because for high-end brands, everyone is used, it is actually a derogation of the value of luxury brands.

"the Chinese market is too big and the consumption is too strong. Some brands pursue maximum profits and develop madly. In a short time, they bring very beautiful results to the brands and the group that they are in, but the short-term development really damages the long-term development and growth in China, causing many brands to face a crisis."

Dr. Zhou Ting told reporters.

Less than P, however, she also stressed that market popularization is not a danger, but also a market opportunity.

But the popularity of the brand is a danger, such as lowering its core value.

In China and similar China's emerging markets, luxury consumption does exist in the mass market.

"If the popularity of the market leads to the popularity of the brand, it is a crisis."

"for example, many luxury brands are expanding in China. The most important problem is that when the market is popularized, the brand is also popular, and the brand will be lower and lower. This will affect the long-term development in China.

A brand like this does not find a balance between the popularity of the market and the popularity of the brand.

In fact, it can adapt to the popularization of the market while maintaining the high-end character of the brand.

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five, luxury brands are on the decline? /p >

> what is a real luxury? Li Mengsu, editor of fashion magazine, thinks that the three conditions conforming to "precious material, exquisite workmanship and scarce quantity" are enough.

Less than P, however, some analysts believe that many luxury brands today have run counter to their connotations.

In the past 30 years, the luxury industry has changed greatly with the development of the mass market and the emerging market. The most important change is that luxury goods begin to be industrialized and collectivize.

With mergers and acquisitions, luxury brands may become the prey of new owners pursuing profits.

Some luxury brands deviate from the original concept of luxury goods under the guidance of short-term economic goals, and they are forced to sacrifice their core products or mass production.

"has been polluted by commerce."

Li Mengsu sighs that luxury is no longer what it used to be.

Fashion Writer Dana Thomas wrote in the book of luxury! The average brand has a profit of 10-13 times higher than the investment capital.

And thorough capitalist operation, and making every effort to earn more profits, will drive them to steal and replace, and even shoddy, even quietly pferring production lines to developing countries, ruthlessly exploiting local labor force, and bringing about the devastating disaster of the environment.

utilitarian market motives make more and more luxury brands "go to the dogs".

However, Zhou Ting denied the use of the word "depravity". Instead, she used the word "decline".

"I think some brands' ambition to pursue profits in China has led to the decline of brands."

a second-hand luxury industry insider told China news weekly net that the brand wants to create high profits, any enterprise wants to.

The relationship between brand and product is not well controlled.

Value has shifted from brand to user, from user to brand.

for luxury brands, it is urgent to stop the crazy and blind expansion and reconsider the future development based on the Chinese market.

Sun Yafei said, in fact, brand dealers are very aware of how they should face negative things.

According to reports, this year many international luxury luxury brands choose to adjust the opening plan in China, the overall adjustment has become the main direction, especially to enhance the profitability of single stores.

For example, GUCCI will be reduced from the original 10~15 store to 3~4 store every year. Instead, it will refurbish and expand the existing stores to maintain the high-end image of the brand.

Dr. Zhou Ting said: "indeed, the expansion of many luxury brands, including the foundry of the foundry and quality of service, has led many brands to decline. But the group management behind the brand has already realized this problem. Their strategy and strategy is to find the next" LV "and find new brands and market growth points.

> therefore, many luxury groups are developing diversified and acquiring more and more. This shows that they have realized the coming of "decline".

Zhou Ting said that the strategic level of the brand behind the brand may have sacrificed the brand, but it has achieved the overall stock market performance of the group.

But from the brand market results, it hurts a lot.

initially, luxury goods came to China, subconsciously thought that China's consumption concept was very low, underestimated the Chinese consumption IQ and EQ, but the learning speed of Chinese consumers exceeded their understanding.

"the luxury market in China is developing at the same speed as five years abroad, and the rapid changes in the market lead to many brands unable to respond quickly.

Moreover, the luxury industry is not like mass goods or manufacturing, its market reaction rate is very slow, and brand crisis management is not in place, resulting in brand traps.

Zhou Ting told reporters.