Domestic Luxury Growth Slowed Down Big Change In Hua Celve

Chinese people are the world's largest luxury consumer groups, so luxury brands always regard the Chinese market as one of the most important markets. However, recent data released show that the growth rate of luxury goods in mainland China has slowed down, and the growth rate in 2014 is estimated to be only 2%-4%. The relevant retail data released by Hongkong region also showed that luxury goods sales in Hongkong area plummeted 39.9% in April. Corresponding to these data, the layout strategy of some luxury brands in the Chinese market has also changed, sticking to the first tier cities, expanding the two or three line, and testing the water business channel. At the same time, in the field of watches, a "parity action" between Hongkong and the mainland is also being launched.

　　 China Mainland luxury goods growth rate is only 2%-4%

As a researcher in the luxury industry, Bain consulting will publish all kinds of research reports on a regular basis. Recently, its global luxury market monitoring report 2014 Spring Edition released by the Italy Luxury Association showed that the global luxury market in 2013 was 217 billion euros, an increase of 2.2% over the same period last year, eliminating the negative impact of exchange rate and a net growth of 6.5%.

In 2014, the global luxury market will maintain growth, which is similar to that of last year. The net growth rate at the fixed exchange rate is about 4%-6%, but it will not reproduce the double-digit high speed growth in 2009~2012 years. The explosive growth driven by the Chinese market no longer exists.

The performance of the global luxury industry in the first quarter of 2014 was basically the same as that of the whole year: an increase of 2%-3% over the same period, which eliminated the adverse effect of the exchange rate and a net growth of 6%.

The report also forecasts the global luxury market in 2014. The growth rate of 2%-4% in the mainland market is much lower than that in the Japanese market due to the depreciation of the Japanese yen, which is not as fast as the growth rate of 4%-6% in the Americas. It is not even as cold as that in the mainland of Hongkong, China's luxury market in 2014.

It is said that this prediction is based on the sudden growth of the Chinese market in the past few years, and the sensitivity of the mature market to the economic crisis is enhanced. Although there is no surprise, this growth rate is steady and healthy, and those brands that can follow the trend and do not rely too much on the specific market are promising.

At present, the main difficulty in the growth of luxury consumption in mainland China lies in the fact that the anti-corruption policy is against the consumption of gift giving and the consumption outflow caused by the obvious price difference at home and abroad. Data show that one of the important gifts category watches accounted for more than 1/5 of the total domestic luxury consumption, and its sales dropped by 11% in 2013. The growth of men's clothing category also showed a slight decline this year. In addition, due to various factors such as tariffs, luxury products have been widely priced at home and abroad, which has led to more and more Chinese consumers choosing to go abroad or buy luxury goods on behalf of others. Bain said that the consumption of Chinese luxury consumers in overseas accounts for about 2/3 of the total expenditure.

Luxury sales in Hongkong plummeted 40% in April

Because there is a certain price difference between luxury goods in Hongkong and the mainland, many mainland consumers will go to Hongkong to buy luxury goods. This has also raised the sale data of luxury goods in Hongkong to a certain extent. However, the latest retail sales statistics in Hongkong showed that retail sales in April decreased by 9.5% compared with the same month last year. This is a further decline in retail sales in 2 and March compared with 2.3% in the same period last year. The correlation analysis pointed out that the decline in retail sales in April was mainly due to a sharp fall of 39.9% in the sale of luxury goods, which partly reflected the slowdown in the consumption of free travellers after the long term surge.

Statistics show that in April, the sales value of jewellery, clocks and gifts in Hongkong declined by 39.9% compared with the same period last year. Sales for department stores also fell by 1.3%, while electrical and photographic equipment fell by 8.3%.

More retail industry insiders pointed out that retail sales of jewelry, watches, electrical appliances, cosmetics and so on before and after the May Day holiday were two lower than the same period last year. 30% 。

Hongkong watch industry insiders told the media that consumers used to prefer watches with a price of HK $400 thousand -50, but the price of best sellers has dropped to 100 thousand -30 Hong Kong dollars. Moreover, the consumers who buy the latest watches are mainly wearing their own clothes, and the proportion of business gifts shopping is obviously reduced.

Italy luxury group Prada released the latest quarterly report (2014 2~4), to a certain extent, confirms this trend and change. According to relevant reports, Prada sales were 777 million 700 thousand euros in 2-4 months, down 0.6% from a year ago, due to exchange rate fluctuations, channel rectifying, weak tourist consumption, especially the reduction of tourists from mainland China, and intensified competition in leather goods market. From a regional perspective, sales in the Asia Pacific region fell by 1.2% over the same period (unchanged at 3.9% year-on-year), with the most depressed market in China's Hongkong, Korea and Singapore. Group CFO points out that the composition and consumption behavior of Chinese overseas tourists are changing, luxury shopping is decreasing, and it has spread to Europe, Hongkong, Korea and Singapore.

Regarding the market outlook, MAE Lai hung, chairman of the Retail Management Association of Hongkong, said that it is expected that Hongkong will remain grim in May and June and that the proximity of the world cup will affect the consumption intentions of local and inbound tourists, and that retail performance is expected to remain weak. Its annual growth forecast is likely to fall to 5% from the original expected maximum of 12%.

More diversified channels in the future

The growth of luxury goods in the Chinese market has been weak, and a series of new changes in the Chinese market have, to a certain extent, dealt a blow to the confidence of the major luxury brands in opening up new stores in China. Many large groups have also indicated that they will carefully consider the plan to open a new store in China. Bain's correlation analysis also pointed out that although luxury goods in mainland China's two or three tier cities have maintained growth, the first tier cities are in a difficult position.

In fact, in recent years, luxury brands have shifted their focus in the Chinese market from the first tier cities to two. Three line A very important reason for the city is that the luxury market of the first tier cities in China has gradually become "saturated" in recent years. It is hard for them to achieve greater growth in these cities, while new stores in the two or three line cities with relatively backward purchasing channels can earn a certain income growth for the brands. Compared with the opening of new stores, the major brands in the first tier cities are adopting store renovation, expansion or relocation to enhance the image of the store and consolidate the existing consumer group.

Reporters also learned that many luxury goods began to play a low profile with the domestic e-commerce platform cooperation. This year, Burberry (Bo Baili) and Estee Lauder have opened an official flagship store in Tmall. Estee Lauder also used Tmall's flagship store as the first third party e-commerce website authorized to sell authentic products in China.

In the media interview, Zhou Ting, President of the Institute of wealth and quality, entered the Chinese electric business with luxury brands. He wanted to make full use of the third party platform to deepen the online luxury market in China and transform the flow of the third party platform into the brand's own traffic. She also said that more and more luxury goods will be open to the e-commerce platform in the future.

In addition to changes in the channel, the price strategy of luxury goods makers in the Chinese market has changed a little. Following the HUBLOT's first announcement in February of the same price between the mainland and Hongkong (the price of mainland products will be reduced by 10% to 20%), the Swiss watch brand of the French luxury group MOET & CHANDON Hennessy Louis Weedon (LVMH) also announced that the 2014 wrist watches would be priced in the mainland, Hong Kong and Taiwan at the same price in China, and the price would be the same as that of the Swiss franc.

Some experts say that with the rapid development of e-commerce and the adjustment of tariff policies in various countries, the price integration of luxury goods in the global price is expected to become the general trend.