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    LVMH'S TAG Heuer Also Follows Price Cuts.

    2015/3/19 10:51:00 41

    LVMHTAG HeuerPrice

    This news should have broken up your circle of friends last night: Chanel announced the price adjustment in China since April 8th, and the three classic handbags will be reduced by 20%. Don't worry, this is just the beginning. It is reported that LVHM group's TAG Heuer plans to cut prices in China, Switzerland and the United States at the same time, with Hongkong down 13% and Mainland China down 8%.

    Over the past two years, China's high-end watch market has shrunk rapidly. The import of high-end watches in China reached a historical peak in 2011 and 2012, but the situation began to turn downward in 2013. In 2013, China's high-end watches imports fell by 89%, to just $653 million, or 4 billion 70 million yuan, to 9 years ago. Imports of high-end watches also dropped by 88%, and China imported only about 100 thousand high-end watches throughout the year.

    The Swiss Watch Industry Federation's latest data show that in 2014, the Swiss watches in mainland China dropped by 2.8% over the same period last year. In addition, the publication of Bain Luxury goods The report pointed out that the sales of high-end watches in mainland China's luxury market also declined the most, falling 5%, 11% and 13% in the past three years.

    The dilemma faced by luxury brands in China is much the same. According to Bain data, only 30% of the 380 billion yuan luxuries consumed by Chinese people in 2014 occurred in the mainland of China. Because of the high price difference of high-end watches, most consumers still choose to buy abroad. Not only that, the domestic anti corruption trend has also pushed back a large number of customers who used to buy luxury goods as gifts in China.

    The Heuer Watch is not the first high-end wrist watch brand to adopt the same price strategy. As early as January 2014, with the LVHM group's inventory, the price dropped by 15%. Hong Kong Mainland equivalent price. February 2015, another Swiss brand Patek Philippe announced a sharp price cut in Hongkong, China, with a drop of 22%. Rolex's 5%-7% in Japan increased by 12% in Europe.

    However, because LVMH has relatively independent management of its watch brand, the brand has greater free pricing power. Another luxury group, which owns many watch brands, has no price adjustment plan for the time being. MontBlanc's watch brand MontBlanc told its interface reporters that the price of MontBlanc watches has been relatively stable, and there is no price cut plan in mainland China and Mainland China. The current exchange rate factor is the source of the main spread of its products in the world.

    Although there is no price adjustment, MontBlanc and Cartire, both of them, are using another product strategy to deal with the problem of declining sales - a lower price table. Take Cartire as an example, Cartire has a price of at least 100 thousand RMB for a diamond watch. But since 2014, Cartire has launched a smaller number of watches, that is to say, it needs less than 100 thousand yuan now to buy a Cartire diamond watch, which reduces the purchase threshold.

    Since Chanel launched a big price cut, it has also opened the prelude to the price adjustment of luxury brands. In March 18th, HSBC issued a report that in the next 12-18 months, luxury brands in Europe will continue to price earthquakes, and estimate that the average luxury brands in Hongkong will be reduced by 10%, and that in mainland China will be reduced by an average of 20%.


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