Chanel Triggering A Global Wave Of Luxury Prices

Champs Elysees in France, Fifth Avenue in New York, or Tsim Sha Tsui in Harbour City, Hongkong, has been queued for LV, Prada, Hermes or Chanel stores for two years.

Many of the queues are mainland Chinese customers. Luxury products have become a major trend because they are more comprehensive and more competitive than local ones, and their prices are more competitive with local counterparts.

Queuing often stems from the fact that brand operators have a certain control over the flow of customers in order to allow customers to have a better shopping environment.

This group of shots will soon become "past tense".

In March 17th, Chanel issued a statement saying: Chanel decided to coordinate the price gap of different markets in the world since April 8th. The first adjustment is classic (11.12 and 2.55) and Boy CHANEL handbag series.

The next day when the news was released, Chanel stores in China quickly adjusted prices, which caused consumers to queue up to buy.

In fact, Chanel is not the only one that wants to lower the global price gap for China's regional market.

Before and after the March 19th Basel Swiss watch exhibition, Patek Philippe and Heuer Watch Brands announced the price adjustment strategy in succession. As early as the beginning of last year, Yu boat had implemented the strategy of "three sides and the same price on both sides of the Taiwan Straits".

"No one can ignore the needs of the Chinese market," a head of China's regional brand of Swiss watch brand told reporters. "The gradual realization of the global price of luxury goods will become an industry trend, and this trend has brought many new challenges to the management of luxury goods in China.

For the luxury goods industry, the price adjustment from one to two times a year has become the norm. However, it seems that the good days that only rise or fall will not return.

In the global "boom", careful people will find that many brands in China not only reduce prices, and the intensity is not small, has aroused widespread concern in the industry and consumers.

"This" price coordination "is designed to narrow the spread of prices in all markets," the statement said.

Under the price coordination, customers can buy Chanel products at similar prices wherever they are.

By implementing this strategy, Chanel continues to consolidate the brand's global consistency and create new opportunities for development.

This can also enhance the shopping experience of customers in boutiques, highlighting Chanel's excellent service and distinctive.

At the same time, it can also inhibit the influence of overseas purchasing market on brand image.

"Wei"

Indeed, over the past few years, Chinese consumers have been led by price discrepancy at home and abroad.

Increasingly, data show that in 2014, Chinese consumers luxury goods all over the world.

The amount is as high as 106 billion US dollars, of which China's domestic consumption is only 25 billion dollars, and the Chinese have bought 46% of the world's luxury goods, and only consume 1/4 locally.

Compared with overseas stores, consumers in China's stores are "buying more and buying less", and even many consumers in China's stores are optimistic about the style and the number of goods, and then go to overseas stores to buy them. The overseas purchasing of electricity suppliers has made many brands love and hate interweave -- putting aside profits, and the spread of fake commodities will also derogate the brand image.

No brand can throw away the Chinese market, but how to take the consumer behavior as much as possible in the locals? This becomes an important factor for the brand to consider. Otherwise, how can the local market operate and develop healthily in the long run?

Although the industry has repeatedly stressed that "price sensitive consumers are not the core consumers of luxury goods", but in the face of price differences at home and abroad, even "Tu Fei" has swept the goods in Europe.

The downturn in China's performance and the global purchase of Chinese consumers have finally left the management far away from Europe's headquarters, and the euro exchange rate has continued to go down. Brand leaders have made a tough decision to raise prices in Europe and reduce prices in the Chinese market.

The news of Chanel's price cut is a long queue outside its Chinese stores. It seems that it has not been staged in Chinese stores for a long time. Tan Xiangzhong, Chanel public relations manager, said: "we welcome every customer who comes to Chanel boutique, and we are committed to providing every customer with a respecting service."

"Queuing incident" has attracted wide attention. Immediately, there are fashion designers who question Chanel stores' products. Chanel's packages are all star products, limited supply and large scale sales. The brand is afraid that there are not so many goods, and it is doubtful that fake products will be mixed into it.

But Tan Xiangzhong negated this assertion and said Chanel would "make every effort to satisfy the customers with existing products available".

After the price reduction, the cost and profit of China will undoubtedly be affected.

Tan Xiangzhong responded to the China operation newspaper that the price of various markets would reduce the profits of the brands in some markets and increase the profits of some markets. However, the purpose of this price adjustment is not to protect the profits of Chanel.

"Excessive price difference" is the main factor affecting brand image, rather than simple profit.

It's not just Chanel's brand that decides to do this.

The annual watch event, the Basel watch and Clock Fair, is also on the brink. The Patek Philippe, the leading brand of the watch industry, has also told the outside world in a low profile. In February 10th, Patek Philippe took into account the situation in the Swiss franc and the euro area, and decided to narrow the price gap due to exchange rate changes in the world.

The price adjustment is not only in the Swiss franc area, but also in the euro area, the US dollar area, the mainland of China, Hongkong, China and Japan.

Brand leader told reporters that in mid March, Patek Philippe began to implement a price reduction of 18% in China and 7% in the market outside China.

In this way, we hope to narrow the global price gap as far as possible, safeguard the interests of dealers and consumers, and let the local market do its business well.

"The decision to make a quick price adjustment may be because Patek Philippe is a family business. The 5 members decided that the loss caused by the price adjustment is determined by the family business." the brand leader said that any group's luxury brand could make such a decision very hard. "But after adjusting the price, it is impossible to completely flatten the price difference between the different markets, because the taxes of different countries are different."

In an interview at the Basel exhibition, reporters found that due to this price adjustment, the Heya watch also reduced the price of watches for many sports and cooperative watches.