Slow Growth In The Second Quarter, China'S Difficult Pformation Of Old Luxury Goods

< p > for group a href= "http:// www.91se91.com/news/index_c.asp" > performance decline < /a > part of the reasons, LVMH group chief financial officer Jean-Jacques Guiony said that Chinese consumers on its group's Louis Vuitton and other leather goods and fashion luxury brands demand is declining, regardless of consumption in the domestic or international market has been "substantially reduced".

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P, another luxury group, is growing stronger than LVMH group.

The latest second quarter performance report also shows that sales of Hermes are 963 million 400 thousand euros, 9.6% higher than the fixed exchange rate, but the growth rate is 14.7% slower than that of the first quarter of this year.

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< p > the reason why most luxury brands will slow down their performance in China this year is due to the impact of China's anti-corruption policies and the slowdown in the demand for luxury goods in China.

But some people in the industry believe that this is not the most important reason.

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< p > < strong > old brand < a href= "http:// www.91se91.com/news/index_c.asp" > luxury goods < /a > pformation is not smooth > /strong > /p >

< p > in the first half of this year, LVMH group's total sales volume was about 14 billion euros, less than the expected 14 billion 349 million euros, 2.8% higher than last year, and organic growth rate of 5%.

In addition, its continuing business profit decreased by 5% to 2 billion 576 million euros, much lower than the 2 billion 760 million euro forecast, and its operating profit margin shrank from 18% in the same period last year to 18%, and its net profit was 1 billion 509 million euros.

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< p > it is noteworthy that the sales of leather goods department of LVMH group's flagship luxury brand Louis Vuitton (LV) rose by 2.7% to 2 billion 391 million euros, compared with 10.7% in the first quarter.

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Sales of < p > Louis Vuitton are more than two times that of its rival Gucci, which has created more than half of the operating profit for LVMH group. After experiencing the rapid development of the annual growth rate of more than 10%, the growth rate has dropped significantly, and is mainly driven by the new store.

The industry generally believes that the brand is overexposed, has reached market saturation, and has lost its appeal to high-end consumers.

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< p > Louis Vuitton, a former executive, told the first Financial Daily reporters in the mail that the number of products produced by luxury brands should be less than the quantity of products they can sell. "Scarcity" is a part of luxury. "In order to achieve faster growth, get more profits and abandon the rules of luxury goods, we will pay for this kind of" neglect of goodwill ".

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For example, Louis Vuitton is making a big move. On the one hand, it follows its competitive brand, the Hermes strategy, produces more expensive products (such as hand-made customized handbags), provides more high-end services, replaces itself in the high-end luxury goods market, and strategically slows down the pace of growth in the number of new stores, reducing the average annual 10~15 home to 2 per year, in order to avoid over exposure of brand exposure. It also complies with the trend that Chinese mature consumers are becoming weary of the luxury of P logo, and has launched the first "no logo" advertisement for the Chinese market.

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< p > however, a person who has been engaged in luxury brand research in Shanghai has told reporters: "although LV was a synonym for luxury goods in China a few years ago, more and more people are now pursuing Hermes."

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< p > < strong > the reason for slower growth is < /strong > /p >

< p > in the latest report of LVMH group's latest quarterly report, it is worth noting that sales of wine and spirits sector dropped by 7%, a decrease of 1% from a comparable base and a constant exchange rate and a 14.5% to 461 million euro of continuing profits.

LVMH group said that this is mainly due to China's crackdown on gifts, anti-corruption and the reduction of inventory by distributors, resulting in Cognac sales being hit.

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Less than P, its watches and jewellery Department sold 1 billion 266 million euros, down by less than 1% a year, organic growth rate was 3%, and operating profit fell 31% to 105 million euros, which failed to reach analyst's target.

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< p > "although a href=" http:// www.91se91.com/news/index_c.asp "> wrist watch" /a ", some leather goods, high-end liquor, foreign wine and other fields, it is indeed affected by China's anti-corruption policies, but this is not the most important reason for the slowdown of the above luxury group sales in China.

Zhou Ting, director of the luxury goods field and President of the Institute of wealth quality, told reporters that "the accumulation and exposure of traditional luxury brands in the Chinese market is the real reason."

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< p > she thinks, first of all, the upgrading of consumption in China and the psychology of consumers are changing. However, the traditional luxury goods brands have not caught these changes in time. Some core consumers have begun to escape from the traditional top brands. Secondly, some traditional luxury brands have not been paid much attention to before, and even now there are many fake actions, including the counterfeiting of luxury websites.

Again, although some luxury brands have maintained high standards in store experience and shopping experience, they often have double standards in the Chinese market for after-sales and maintenance services, but there are significant gaps in maintenance time and maintenance standards.

In addition, the lack of product innovation, some clothing and apparel brands in China are mostly classic, basic, goods on the new speed is often later than abroad, and most of them do not have customized products for China or Asian market.

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Less than p luxury brand researchers also believe that China's luxury market has been divided rather than the slowdown in luxury consumption in the Chinese market. This shows that while some luxury goods growth is slowing down, other brands have maintained rapid growth in the Chinese market.

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< p > Zhou Ting also noted that although the traditional luxury brand has slowed down in China, some new international luxury brands, high-end niche brands and customized brands have maintained double-digit growth in the Chinese market.

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"P", "some luxury brands bring preferential conditions to the development of China's commercial real estate, and constantly expand their sales network, which may cause further decline in their performance."

Zhou Ting said that if the total number of stores in such a single market in China reached 3 digits, it would be a dangerous signal. Luxury goods should be sold in their own specific channels instead of everywhere.

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< p > she also noted that some luxury brands have begun to carry out channel changes, on the one hand continue to increase the layout of key cities; on the other hand, some shops are also being shut down in non key cities to enhance the quality of single stores; in addition, many brands are also aware that e-commerce is one of the future directions, so they are also building their own e-commerce channels to prepare for online offline interaction and support line sales.

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