How Should Luxury Brands Face The Danger Of China's Market?

< p > after the carnival consumption in 2010 -2012, a href= "http://www.91se91.com/news/index_s.asp" > luxury goods < /a > cards have to face the fact that the consumer Carnival Party is over. In recent months, several luxury companies reported that the era of crazy growth has passed, and now they are more hardworking than ever before to maintain the high-end image of luxury goods. < /p >
< p > April, the PRADA group listed in Hongkong announced the group earnings report in 2013. The group did not gain much profit in the previous year, and sales in February this year even fell into a negative growth link. PRADA's share price fell 12% after the earnings announcement. Several investment banks have lowered their expectations of PRADA. Credit Suisse no longer expects PRADA to grow in terms of sales and profits. The Bank of China International believes that PRADA's profit in 2014 was quite precipitous and lowered its target price. < /p >
< p > the HUGO BOSS, a popular menswear brand previously favored by the Chinese people, relies on that loud name and Italy brand, which is thinner for beauty than DIOR and Dolce&Gabbana. The German brand wide plate is more loved by Chinese officials than the "beer belly" shape. It will not change much in season and is more in line with Chinese officials' low-key requirements. Annual sales fell by 2%, even after adjusting for the exchange rate, which was only 4%, far below the initial sales expectations of investment banks for their double-digit growth. BOSS has more than 100 stores in China, ranking first among all luxury brands in China. < /p >
< p > the first quarter of the world's largest luxury group LVMH2014 reported that its revenue was 7 billion 210 million euros (US $9 billion 950 million), up 4% from 6 billion 910 million euros a year earlier. In 2013, LVMH group's first quarter business income increased by 6% over the same period last year, while the growth rate in 2012 was 25%. < /p >
< p > the world's second largest luxury group, published in the past year's earnings report in May, also showed that the annual operating profit was unchanged from the previous year, which could not continue the growth of the past 3 years, while the total annual revenue increased by only 4.9%. Several brands of fashion and leather products such as Dunhill, CHLOE and LANCEL of the group even expanded the deficit of the group to 38 million euros in the previous year, to 80 million euros. < /p >
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< p > many people attribute the slowdown in luxury sales to weak sales in the Chinese market. The reason is that the central anti-corruption policy, which began at the end of 2012, has dealt a severe blow to the luxury gift giving policy, which has severely damaged sales of luxury goods. < /p >
P has always been the largest market for Asian luxury goods groups, including Japan. Count count brand stores in China are several times the number of stores in the United States. LVMH said that the Chinese government's anti-corruption consumption has not only reduced the watch brand business of the group, but also affected the sales of several brands of foreign wine. A staff member of a wine brand told the economic observer that Cognac's sales were rather dismal this year. The group is transferring the sales center to the middle class consumer's favorite champagne field. The MontBlanc, which is under the peak of the group, has a declining trend. In this year's Geneva exhibition, MontBlanc unveiled a complex watch with a price of 100 thousand yuan, which is considered to be a strategy of reducing the price of watches to restore its flagging market in the past high-end writing tools market. < /p >
< p > there is no data showing how much luxury consumption has been affected by China's anti-corruption. From time to time, in 2013, luxury goods entered the doldrums in the Chinese market. Louis Ferla, President of Cartire China, said that no country has ever seen such a clear distinction between official consumption and personal consumption as the Chinese market. Louis Ferla believes that luxury brands should be ready for normal development in the next eight years, compared with the rapid growth in the past. < /p >
< p > how high is the proportion of the Chinese market in luxury consumption? PRADA earnings show that the 1/4 of its sales comes from the mainland market, and the market has gradually become calm since 2012. According to the April data released by the Swiss watch Federation, mainland China has fallen out of the top three markets of Swiss watch exports, ranking eighth, while Swiss watch sales in mainland China dropped by 6.5% in April. In 2013, Chinese spending on luxury goods fell by 15%. In the first 11 months, the number of watches imported from Switzerland also dropped by 15%. < /p >
According to the luxury goods report released by Bain consulting firm, the global luxury market in 2013 was about 217 billion euros, accounting for about 29% of the Chinese market, including two cases in mainland China and overseas shopping in China, which is far more than 22% in the US and 21% in Europe. P < /p >
< p >, therefore, the description of the Chinese market is usually added to the earnings of major companies. The 2013-2014 quarter third quarter earnings report of the world famous luxury goods group, Switzerland, has made such a statement. "All regions except China have achieved satisfactory growth, but the growth of wholesale channels is slow, especially in the Asia Pacific market. The Asia Pacific region continues to be in a downturn, but the net growth rate is slightly better than 6% in the first half of the year, and all the major markets in the Asia Pacific region have increased, and sales in mainland China have only dropped compared to the same period in the year of 4%. < /p >
< p > but not all falls are considered the consequences of this policy. In 2013, GUCCI experienced its first decline in sales in China since 2009. The US media believes that it is related to the slowdown in China's real economy; GUCCI argues that it is because brands are reducing entry level luxury goods and concentrating on high-end products, and public opinion is generally convinced that such a decline means the awakening of consumer awareness. The brand with LOGO as the design element is being rejected by picky consumers. < /p >
P > Chinese consumers' overseas shopping is also considered to reduce the growth of luxury goods in China. PRADA group Patrizio Bertelli said that despite the slowdown in Chinese market sales, Chinese consumers' overseas demand remained strong. According to the 2014 China luxury goods report released by Rhodes public relations Ipsos consulting agency, 92% of Chinese consumers are not satisfied with the services provided by local stores. They prefer to spend overseas. People are used to buying watches and drinks in Europe, and buy pearl, leather handbags and high-grade cosmetics in Hongkong. Data released by China's outbound tourism fair show that in 2013, nearly 100 million Chinese outbound tourists and 102 billion dollars of overseas consumption jumped to the number of outbound tourists and purchasing power. < /p >
"P", which has spread throughout the world for several years, has also affected the consumption of luxury goods. According to the data of Paris spring department store, Printemps, a high-end chain store group in France, its sales increased 3.9% in 2013, slowing down from 5.7% in 2012. Mainly because of the European economic crisis, the domestic consumption desire is not high. In the past 5 years, Paris's spring sales have increased by 40%. < /p >
< p > Rhodes, senior vice president of public relations, Gao Ming, did not think that the sales of luxury goods, as the media said, was experiencing an exaggerated decline. "I feel that the growth is not as strong as the two digits before. It is strictly known as a slowdown." Rhodes PR provides public relations advisory services to more than 20 luxury brands including Hermes and Vacheron Constantin. "If we look at the whole industry, we can see that the frequency of brand activities can also be seen if luxuries are really not spent. From public relations activities, I do not feel that the budget has been greatly reduced, even from CRM. Of course, the cost of brand advertising may be less, because they want to spend more money in the current situation, such as public relations activities that can cause higher social concerns. Of course, it may also be understood that in the face of a weak market, more sales promotion measures are needed to maintain growth. < /p >
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< p > however, the popularity of some "light luxury brands" is believed to prove that luxury goods sales are experiencing polarization. Many brands in the Basel watch exhibition are swarming with 10 thousand -3 watches this year to provide more choices for the purchasing power middle class. And a target= "_blank" href= "http://www.91se91.com/" > clothing < /a >, just in Shanghai held the first overseas show of Michael Kors is the most popular clothing brand in recent years, its main push thousands of yuan package to help the young brand ushered in the 31 quarter of growth, at present, the whole group market value has reached 192 dollars, ranking fifth in the luxury market, second only to PRADA. < /p >
P, another small but expensive brand, has also played an enviable advantage in this ebb tide. The high-end jewellery brand, von Jebel, has a bright eye in the group. It has just held its first overseas fashion show brand CELINE in Beijing. Its global CEO Marco Gobbetti, in an interview with the economic observer, said that the sales data of CELINE were very good, and it was not affected by the anti-corruption policy. "Because we are not a brand born for giving gifts, we have a strong style. At present, China is one of our five largest markets, and it will be more important in the future." In 2013, the LVMH group released a report showing that CELINE was a surprise brand. Its strong design style attracted the investment of white collar women in their garments and leather goods, and the average price of CELINE leather bags was around twenty thousand yuan. < /p >
P, another Italy fashion brand that has just entered China, has won admirable results in 2013. Its annual sales performance is 120% higher than that of the previous year. Of course, this is also due to the fact that ETRO started relatively late in China, with a smaller base and all independently opened stores. "ETRO" The decline of HUGO BOSS's performance was pointed out by the media that it was too close cooperation with distributors in the past, and more wholesale rather than high fashion lines. Now, HUGO BOSS is also beginning to gradually withdraw its right to operate independently and open more proprietary stores. < /p >
The top P brands still feel relaxed in the face of the pressure of sales growth. In the first quarter of Hermes2014, the total revenue reached 943 million 500 thousand euros, up 10.1% from 856 million 800 thousand euros in the same period last year. Excluding the exchange rate, the comparable growth rate reached 14.7%, exceeding the market expectation. Asia continues to inject strong momentum into brand growth, with sales in Japan increasing by 22%, and China's performance is also outstanding, with a growth of 18%. Even in other European markets where other brands are having a headache, Hermes has also gained 8% of its sales growth. < /p >
Patek Philippe, the leader of watch brand, is also investing more in China. P has focused on providing better quality after-sales service. This month, it opened its flagship store 23 in front gate of Beijing and renamed it "Yuan Di" like Shanghai store. Its partner, CEO, believes that in 2013, the watch industry did experience a depressing recession. But he and Patek Philippe brand holders Stern family believed that they could not reduce their investment in China. So since last year, they have refurbished the shops in Beijing, and Patek Philippe Thierry Stern told reporters that the enthusiasm of the Chinese market requires them to provide better services for consumers. < /p >
"P", a relatively small watch brand, Jean Claude Bif, global CEO, said in an interview with our reporter. "The top brands do not worry about business. We sell in more than 100 countries around the world. It only needs to sell 400 watches in China every year. Can we not find 400 guests? Of course, the ups and downs of the economic environment, it's no big deal, just like life. < /p >
< p > it can be seen that anti-corruption and economic crisis have passed the good days of < a href= "http://www.91se91.com/news/index_s.asp" > luxury brands < /a >. Next is normal competition against the normal market. < /p >