"Prohibition Of Luxury Orders" Vying For LV And Other Old Luxury Goods In China's Difficult Transformation

stay LVMH In the latest quarterly report of the group, it is worth noting that sales of wine and spirits sector dropped by 7%, a decrease of 1% based on comparable base and constant exchange rate and a 14.5% to 461 million euro of continuing profits. For part of the decline in group performance, Jean-Jacques Guiony, chief financial officer of LVMH group, said that Chinese consumers' demand for leather goods and fashion luxury brands such as Louis Vuitton and their group is declining, and consumption in both domestic and international markets has been "substantially reduced". This is mainly due to China's crackdown on gift giving, anti-corruption, and the reduction of inventory by distributors to Cognac sales.

According to relevant media, a series of "prohibition order" has become the real reason for the slowdown of LV, Hermes and other old luxury goods in China, according to the eight Central regulations. Sales of luxury goods have fallen to two digits this year, and sales of business gifts have been particularly hard hit in the past. According to the insiders of several luxury brands, as the sales are affected, the major luxury groups begin to adjust the expansion strategy in China, shrink the number of stores and reduce the number of new store programs will become the next mainstream trend.

For this reason, LV LV On the one hand, it is transforming the big moves, following its competitive brand Hermes strategy, producing more expensive products (such as hand-made customized handbags), providing more high-end services, repositioning itself in the high-end luxury goods market, and actively slowing down the growth rhythm 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 logo luxury goods and has launched the first "no logo" advertisement for the Chinese market.

However, Zhou Ting, President of the luxury goods field and President of the Institute of wealth and quality research, believes that the upgrading of Chinese consumption 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 received much attention before. Even now, even a lot of fake activities, including the counterfeiting of luxury websites, are just a drop in the bucket. 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.

　　 Zhou Ting It is also noted that although the traditional luxury brands are slowing down in China, some new international luxury brands, high-end niche brands and customized brands still maintain double-digit growth in the Chinese market.

"Some luxury brands are expanding their own sales network through preferential conditions brought about by the development of China's commercial real estate, which may lead to 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.