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    Why Luxury Goods Sell In China?

    2015/3/24 19:02:00 24

    Domestic MarketLuxuryPrice

    China is already the world's largest consumer of luxury goods, but 70% things are bought overseas.

    Within the same brand, the difference between domestic and overseas prices is less than two or three.

    Take Chanel as an example, before the price adjustment, the factors of the euro's RMB exchange rate plummeted are compared. The the Bund store in Shanghai is more than Paris.

    The Buddha

    It's seventy or eighty more expensive.

    Luxury brands are basically the same.

    Through relatives and friends, buyers and sellers in Europe, America, Japan and South Korea bought diamond rings, bags, watches, board shoes and so on.

    Tax rates and circulation costs are often used by luxury brands to defend price differentials.

    Indeed, the domestic right.

    Imported

    Luxury goods are taxed at the beginning of importation.

    After tax, value-added tax and luxury goods consumption tax, the price is more than two or three higher than that of overseas origin.

    This is actually the price difference between many brands in the mainland and Hongkong.

    Buying a diamond ring in Tiffany in central Hongkong is almost the same as twenty percent off in China World Trade Center.

    This is far from the story.

    Quite a lot

    brand

    The price difference is obviously higher than two or three, and behind it is the "high price strategy" that merchants are interested in.

    Luxury brands only shop in the prime locations of the first tier cities, while using "limited supply", "advance marketing" and other supply strategies to create "hunger marketing".

    The price increases correspondingly in this atmosphere.

    But only one willing to fight.

    Some localisation reasons in China are obviously more responsible.

    Among them, the gift giving culture and vain psychology are very prominent.

    Officialdom and shopping malls have become important places for luxury goods.

    Under the logic of the more expensive gifts and the more sincerity, the luxury under the aura obviously provides an excellent choice.

    At the same time, because the large amount of consumption does not actually come from buyers' pockets, the price sensitivity of buyers is also very low.

    Therefore, it is often reported in a store that a big deal like a supermarket buys pork.

    More important purchasing power comes from young people.

    The average age of luxury consumption in China is 15-25 years lower than that in Europe and the United States, which is obviously younger.

    At the same time, the purchase amount of luxury goods accounts for a much higher proportion of income than that of western developed countries.

    Americans spend less than 5% of their money on luxuries, while Chinese white-collar workers pay two months' salary to buy a bag and buy a watch every year.

    The cultural identity behind imported luxury goods is even higher than that in foreign countries. Many young people buy these products just to get rid of them when their friends get together.

    The combination of these factors has led to the embarrassment of domestic luxury goods prices in the global market.


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    Read the next article

    What Makes Chanel Lower Prices?

    Chanel's adjustment is not intended to maintain the domestic and foreign spreads before exchange rate fluctuations. The cost of customs duties and rent seems to have vanished mysteriously now. So we can not understand Chanel's behavior in the way of understanding the logic of price adjustment in the Swiss table when Russia's ruble depreciated.

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