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    LV China Is In Big Trouble

    2015/1/4 22:38:00 49

    LVLuxuryTrouble

    Though LV has evolved into the handbag of the square dance aunt, everyone is still very expensive.

    Luxury goods

    The brand is skeptical, but the perception is directly reflected in its performance, and it always lags behind.

    In the second quarter of this year, the LVMH group's earnings report was released. In the first quarter of the short term, the sales growth slowed down in the second quarter, only 1.3%. The group finance officer Jean-Jacques Guiony admitted that Chinese consumers' demand for leather goods and fashion brands such as LV declined.

    Probably anyone would say that this early step can be expected, but if you do not sum up the experience and lessons, who will follow the footsteps of LV.

    Also, don't forget the more important thing. If your family is broken, you have to think of a way to make up for it. LV is also worried about fixing the pot.

    It's hard to change a few years and become a hero again.

    So the reporter came to give LV a diagnosis, and by the way, he could see how others opened their own prescription.

    Do you still love LV? What kind of mentality are you still carrying LV? Let's talk about it when you have time.

    Louis Weedon (hereinafter referred to as the "LV") store sales Huang Deng clearly felt that the sale of the "two sessions" on the eve of the sale is not enough, rarely seen those who require the government or troops to issue invoices.

    The contrast is so intense that in the past, especially in Beijing, during the "two sessions", even some luxury brands including LV were regarded as another peak season outside the Chinese market.

    Today, the grand occasion is no more.

    The official consumption of luxury goods was hit by the regulations issued by the State Council in July 2012, which explicitly stipulates that the government prohibits the purchase of luxury goods, which was formally implemented in October last year.

    Lv Huang, partner and managing director of Greater China in Boston consulting company, said: "men's clothing and high-end foreign wine are all affected, while the purse and belt that are more popular gifts are also implicated."

    As far as the city is concerned, Huang Deng said that Beijing and provincial capitals were more affected. "The proportion of public gifts in these areas is relatively large, but in cities like Shanghai, people who spend their own money will have more."

    But this is just another blow to the luxury industry in the bottleneck.

    "As far as I know, according to the different circumstances of each brand, public consumption accounts for 10%-30% of its total sales."

    Lu said.

    China's economic slowdown is

    Luxury industry

    In China, the high growth rate has been suspended. According to Bain consulting, the real reason for the growth of China's luxury goods market is around 30% in 2010 and 2011.

    As China's economic growth slowed down in 2012, Chinese consumers' confidence was hit, and their attitude towards luxury consumption tended to be conservative.

    Bain's report shows that the growth rate of luxury consumption in China is expected to drop to around 7% in 2012.

    {page_break}

    Huang Deng feels the most intuitively in the store.

    "The people who go shopping are really missing a lot, obviously."

    He disclosed that in 2012, LV added four stores in China, such as Wenzhou and Changsha, and the result is quite unusual. The total number of visitors to all LV 40 stores has not increased, but has declined.

    "From this perspective, the economy is really bad."

    He also pointed out that in fact, there was no sign of slowing down in the first half of 2012. Usually, after the off-season sales of luxury goods in summer, sales in nine and October will be rapidly boosted, but sales did not recover significantly at that time last year.

    Many luxury brands decided to reduce the number of new stores in China.

    In 2013, the group of Kai Yun group

    Leader brand GUCCI

    (hereinafter referred to as GUCCI) announced the plan to add 10-15 stores to the Chinese market every year, reduced to 3-4, and the brand LV of the LVHM group's head line also said it would tighten the number of shops opened.

    "Every time we encounter bad economic conditions, such as the 2008 financial turmoil, luxury goods will be more rigorous assessment of shop indicators.

    After opening a store, sales do not meet the target, which is a burden for the brand. "

    Nie Qibing, the RET Rui Yi De partner, who is responsible for introducing luxury brands to shopping centers, thinks.

    According to Lu, it is not only a result of declining performance, but also too close to Chinese luxury goods in China, especially in the second tier cities.

    "Compared with the US and Europe, the density of luxury stores in China has been very high, but China's consumption power is actually not that high."

    By the end of 2011, LV had 39 stores in China, 54 in GUCCI and 66 in Burberry.

    Luxury brands have always wanted to enter the three or four line market. In Lu Yan's eyes, there are still some problems such as insufficient consumption capacity, matching consumer sites resources (department stores or shopping centers), and personnel training, and the quality of store operations can not be guaranteed. "This is not a problem that can be solved in a short time, and it needs long-term training."

    It is impossible to maintain growth in the number of stores and increase the store efficiency of each store.

    "From my point of view, many brands began to prepare in 2012," Nie Qibing pointed out. "Some brands will consider closing too close stores, and some brands will consider refurbishing stores and strive to increase single store sales."

    GUCCI has made it clear that it will refurbish existing stores to maintain its high-end image.

    Huang said that LV is also expanding some stores, increasing clothing sales, or adding stores to stores that originally did not sell clothing.

    Previously, for the main leather goods LV, sales of leather goods (mainly luggage and suitcases) usually accounted for over 60%, and second of them were accessories (leather shoes, belts, etc.), accounting for more than 20%, and sales of garments were about 10%.

    This is not only a matter of thirst, but also a consideration of long-term development.

    In the view of Huang Deng, relatively speaking, consumers who try to buy jewelry and garments in LV are relatively mature consumers.

    "It's hard for some new guests to buy clothes from the outset, because in general, everyone buys them from the most basic package."

    This also reflects LV's attempt to abandon dependence on public consumption, Nie Qibing pointed out.

    "Because the clothing category is your own to try, basically are self purchase."

    How fast the change of Chinese consumers has left some luxury brands unprepared.

    Huang Deng said, looking at the eyes of many Chinese people in the past few years, they also buy logo, but nowadays many people are not infatuated.

    "The change of shopping habits that take ten years or even decades to complete abroad can be completed in China in a few years."

    Lu explained that more than 60% of overseas luxury consumption was completed by people over the age of 45, while 70% of Chinese luxury consumers were less than 45 years old.

    "They are not satisfied with where to carry the most expensive bag, but they match different accessories."

    This puts forward higher requirements for luxury brands. Lv Huang believes that the top priority of the brand is to find real consumers and enhance brand loyalty.

    Huang Deng said that some of the luxury brands he knew were to increase the advertising of the TV and airport billboards, which were more widely distributed. "Brands will take the initiative to contact the consumers rather than the past, and feel that someone will be there when they open the shop."

    Relatively speaking, advertising for high-end, niche media such as high-end magazines will be reduced. "These magazines are aimed at people who give gifts and spend on public funds, and the market will shrink if they shrink."

    Lu said.

    In his view, as long as the consumption of luxury goods is pformed from a dependence on official consumption to a real consumer economy, the consumption potential of the future consumer goods will be released once the economic vitality is restored and the consumption power of the three or four line keeps up.


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