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    Luxury Goods In China Market: High End Leather Winters Are Hit By Luxury Wristwatches

    2013/10/7 14:29:00 33

    Luxury GoodsLuxury Goods MarketWristwatch

    Under the cultivation of the first batch of international luxury brands entering the Chinese market, such as LV and GUCCI, after more than 10 years of development, China's luxury goods market has gradually developed into a thriving trend. < p >

    < /p >


    < p > but behind the prosperity is people's blind consumption concept, and on the other hand, they are constantly accumulating wealth.

    Luxury as a symbol of wealth status, to a large extent, delineate a class.

    < /p >


    < p > rich and expensive, one is wealth, the other is status, both of which become the main force of luxury consumption.

    It is either a rich Chinese rich group or a new rich class with fashionable tastes, or a government official who is high in power.

    But as China's anti-corruption efforts intensified, the latter were eager to draw a line with luxury goods.

    < /p >


    < p > in China, the consumption age of luxury goods is generally younger than that of European and American countries, with an average age of about 35 years, while European and American countries are about 45 years old.

    China's strong purchasing power has also brought international luxury goods to the Chinese market. It seems that as long as it is linked to the Chinese market, performance is just around the corner.

    < /p >


    < p > but in the financial year from 2012 to 2013, for all luxuries in the Chinese market, Waterloo has been untouched for many years. The industry calls it "luxury winter".

    They attribute the decline in performance to two points: first, the slowdown in China's economic growth; the two is the Chinese government's anti-corruption.

    < /p >


    < p > from the main products of luxury goods, it can be roughly divided into: < a target= "_blank" href= "http://www.91se91.com/" > clothing < /a > and leather goods, jewelry and watches.

    Women love bags, men love watches. Economic slowdown slows down the women of AI Bao, and the pressure of anti corruption inhibits men's watches.

    In the downward track of the economy, they show different development paths.

    < /p >


    < p >, so the fission begins: the luxury circle is blowing up a "LOGO" wind, and the people who pay attention to taste begin to seek niche and high-end products.

    < /p >


    < p > this indicates that China's luxury consumers are beginning to consume rationally, paying more attention to their individuality rather than showing off blindly.

    < /p >


    < p > for luxury brands of clothing leather and jewelry watches, how to cater to the pace of China's market development and the aesthetic preference of Chinese consumers is the key to the upturn.

    < /p >


    < p > < strong > high-end leather goods cold winter resistance < /strong > < /p >


    < p > when the economy is in recession, people's consumption becomes rational. They begin to cling to their wallets, and the luxuries which are not necessaries of life become the hardest hit areas of declining performance.

    < /p >


    < p > in China, luxury goods of different brands and different categories are quite different, but their commonalities are slowing down.

    From the category, "a target=" _blank "href=" http://www.91se91.com/ "clothing" /a "leather" low-end entry level luxury goods maintained a single digit growth or even near zero growth, but high-end luxury goods still maintained double-digit growth.

    On the contrary, jewellery watches are collectively diving into the high-end luxury watches, even experiencing zero growth, while the middle and low end watches are relatively small.

    < /p >


    < p > as the first batch of luxury brands that first entered China, after two years of rapid development, LV and GUCCI have not had a good time in the past two years.

    The excessive publicity has made it far away from the essence of "scarce" luxury goods. The brand image has been declining, and has become a popular fashion brand. It has even been abandoned by high-end people, and its accompanying performance is also dim.

    < /p >


    < p > LV is the main force of LVMH group's fashion leather products. Since the first quarter of 2013, the 0.4% growth of the fashion leather sector has hit a quarter of the lowest growth since the collapse of the Lehman brothers in 2008 and the US financial crisis. The first half of the year continued to be weak, selling at 4 billion 711 million euros, with a growth rate of only 1%, and operating profit decreased by 1% to 1 billion 497 million euros.

    < /p >


    < p > as Kering group's "one brother", GUCCI's performance increased by only 2.1% to 870 million euros in the first quarter of this year, and its brand income increased by only 4%, lower than 6% expected by analysts.

    The high-end brand BV in the group has always maintained two digit growth.

    < /p >


    P also has Hermes. In its more than 10 years of entering China, its performance has always been advancing at double-digit rates.

    Even in the bleak 2012, Hermes continued to grow at a profit of 26.4%, the highest since 1993.

    Among them, the growth rate in Asia is as high as 28.6%, while China's contribution to its sales is as high as 30%.

    In the first half of 2013, Hermes continued its double-digit growth momentum, with sales reaching 1 billion 767 million euros, up 14.4% over the same period last year.

    < /p >


    < p > compared with Hermes, Prada seems to be more low-key, but it also shows no signs of weakness in its growth rate.

    In 2012, Prada killed a large number of luxury brands with the growth rate of 44.9% group net income, while Asia Pacific growth rate was lower than the growth rate in 2011, but it still maintained an increase of 33%.

    In the first half of 2013, sales revenue was 1 billion 727 million euros, an increase of 11.6% over the same period last year. According to the fixed exchange rate, the sales in the first half of the Greater China region increased by 20% over the same period last year, which is second only to the Middle East.

    {page_break} < /p >


    < p > < strong > luxury watches are battered. < /strong > < /p >


    "P" is also positioning high-end, the fate of jewelry watches is the opposite in the Chinese market.

    < /p >


    < p > as the vane of the watch market development, the wrist watch export data released by the Swiss Watch Industry Federation (FH) provides a good reference for the market.

    According to the data, in the first six months of this year, the export rate in February, May and June decreased by 3%.

    Although the total export volume of watches and clocks reached 9 billion 700 million Swiss francs (+1.5%), the number of watches and clocks continued to decline, and the number of watches and clocks exported was about 13 million, down 7.4% from the same period last year.

    From the market perspective, China's market is the most serious decline, down by 18.7%.

    From the price point of view, the sales of low and medium priced watches increased rapidly compared with high-end watches, and the export volume of watches above 3000 Swiss francs increased by 3 percentage points.

    < /p >


    < p > with the increasing anti-corruption efforts of the Chinese government, the appearance of China's "Uncle" has made it the "top hero" of anti-corruption and has lost the performance of high-end watches.

    As a high-end watch gathered in the history of the group, after several consecutive years of rapid growth has encountered a rare Waterloo.

    In January this year, the group published its earnings report for the three quarter of December 31, 2012. The group's three quarter sales volume was 2 billion 860 million euros, an increase of 5%, much lower than expected.

    In the first half of this year, the Asia Pacific region of the peak group increased by only 5%, much lower than that of the Middle East (+22%), Europe (+13%) and the United States (+11%).

    Jewelry's main brand Cartire [micro-blog] stores have also reduced by 10 in the past year.

    < /p >


    < p > another Swatch group, which owns Longines, Tissot, radar, Swatch and other low and middle watches, the sales growth rate of 8.7% in the first half of this year was the lowest half year growth rate in nearly four years.

    The mainland and Hongkong account for about 1/3 of the group's sales. In the past six months, sales of the two largest markets for Rui table exports fell almost double digits every month.

    But at the end of February this year, Swatch Nick CEO Nick Hayek predicted that mainland China's demand for medium price and entry level products would be strong in 2013, expecting two digit growth, but did not express expectations for high-end products.

    But he said the Chinese market will recover in the second half of this year.

    < /p >


    < p > < strong > adjustment strategy < /strong > < /p >


    Less than P, no one will deny that this year's Chinese market is more complex and changeable than ever before. Especially for the foreign luxury brands, how to deal with Damour's sword, which is hanging on top of every brand executive.

    < /p >


    < p > first, strategic adjustment is the key to challenge.

    In 2012, Arnott, President of LVMH group, announced that he would adjust the group strategy and slow down the pace of expansion, focusing on upgrading the product line and upgrading the store image.

    < /p >


    < p > from the products, the image of LV flooding the streets greatly reduces the value of the brand, and the essence of the "rarity" of luxury goods.

    Especially under the premise of Chinese consumers upgrading, the hidden luxury of LOGO has become the new trend of high-end people.

    In order to cater to Chinese consumers, the new leather products launched by LV last year changed to the classic prints and big LOGO images of the past. The new leather products are brighter in color, less printed and LOGO leather and more low-key.

    < /p >


    < p > from the pformation of shops, expanding or renovating the original shops has become the top priority of channel construction.

    LV also opened its first Louis Vuitton [micro-blog] home in the Chinese market.

    Hermes has also slowed down its expansion step by step. It will expand and renovate its original store as the focus of its work. The Hermes in Nanjing West Road, Shanghai, extends the storefront to the two floor, doubling its area.

    < /p >


    In the Chinese market, the expansion of P is Burberry, but Burberry has to slow down its expansion speed and expand its product line to the make-up and perfume business.

    < /p >


    < p > reality has been pushed back by PRADA, which has always been known for its low profile. In 2011, a href= "http://sjfzxm.com/news/index_f.asp" > PRADA < /a > had ambitious plans to open 80 new stores in 2013 and 2014.

    At the beginning of this year, Prada CEOPatrizio Bertelli once said, "in 2013, we will continue to focus on the expansion of the global retail network", and this year we plan to open 70-80 new stores, including 10-12 in China.

    But the reality is that as of April 30th this year, PRADA opened only 1 stores.

    < /p >


    < p > and Swatch group is in the same direction. In the face of the declining trend of high-end watches, Swatch has begun to shift its focus to the middle and low end market.

    Swatch group plans to open 100 new stores in the world in 2012, but the number and speed of opening stores in China will depend on the specific circumstances.

    < /p >


    < p > in the winter of luxury, the gap between ideal and reality is not a step away.

    < /p >

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