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    Luxury Industry: The Popularity Of Price Cuts Will Become A Trend.

    2015/4/1 13:46:00 38

    Price ReductionLuxuryPopularity

    Chanel, the luxury brand, announced that it would adjust its product prices in April 8, 2015, with the largest adjustment in mainland China and 20% reduction in prices. Meanwhile, the price of products in the European market has risen. After adjustment, the price difference between Chanel in the mainland and Europe will not exceed 5%.

    Chanel mainland has cut prices, and Beijing stores have welcomed passenger growth.

    Reporter survey found that Chanel's price adjustment strongly stimulated the purchasing power of a batch of "fragrant powder" in China. In the Beijing, Shanghai, Nanjing, Hangzhou and other places, Chanel shoppers had already appeared lively scenes of consumers queuing up.

    In addition to consumers, there are also domestic luxury brands, and the LVMH group's tag heuer watches become the first brand to follow up the price cuts.

    Industry experts said that Chanel's price adjustment is just the beginning, and that more luxury brands will adjust the global price system in the future.

    Zhou Ting, President of the Institute of wealth and quality, said that Chanel's price adjustment has the role of weathervane.

    Although Chanel, LV and other brands have been at the top of the luxury sector, in order to maintain brand image, they never discount or promote sales, but the high profile has not brought high efficiency. In recent years, the sales of these brands in China are not optimistic.

    The 2014 China luxury market report shows that in 2014, the major luxury goods groups were

    China

    Sales are still growing, but the speed has slowed down significantly, and the backlog is serious.

    At the same time, the opening speed of traditional luxury brands has slowed down.

    In fact, the domestic luxury goods market is facing a trend of increasingly cold and cheerless. Before Chanel's price cut, luxury stores have begun to go downhill. It is understood that Patek Philippe, HUGO BOSS, Boucheron, D&G and even Giorgio Armani flagship stores that have been in the past 10 years have quietly left the Bund, Shanghai since 2013.

    In 2014, HUGO BOSS closed 7 stores in China, Zegna closed 6, and bolberry closed 4 stores.

    Luxury sales in China are in a bottleneck.

    The Chanel side claims that the adjustment of the global price is mainly due to the sharp depreciation of the euro, which results in a more obvious price difference between China and Europe. The difference between the price of Chanel products in China and Europe is even greater. One result is that the market in Europe is in short supply, and the market in China is very few.

    Although the depreciation of the euro has become a good opportunity for price adjustment of Chanel and other luxury goods in China, many people in the industry have said that the fundamental reason for Chanel's reduction in mainland China is the depression in the Chinese market. According to the China luxury report, the domestic consumption of Chinese consumers in 2014 years is 25 billion dollars, down 11% from the same period last year. The proportion of China's luxury goods market in the global luxury market dropped from 13% in 2013 to 11% in 2014.

    At the same time, Chinese consumers' overseas consumption has been further strengthened. In 2014, Chinese consumers spent $106 billion on global luxury goods (about about 640000000000 yuan), and bought 46% luxury goods in the world, but 76% of luxury consumption occurred overseas.

    In addition, with Chinese people

    Personal wealth

    With the accumulation and the progress of consumption concept, the channels for purchasing luxury goods are becoming more and more diversified. Among them, buying directly from abroad is one of the important channels.

    Relevant information shows that in 2014, the number of outbound tourists in China increased by 110 million, an increase of 13%. Moreover, outbound travel is no longer a patent for the high-end population, and the middle income group is also increasing. The low price of luxury goods in overseas markets has attracted a large number of Chinese people's purchase, and has also given rise to many "professional purchasing".

    At present, there are purchasing businesses on the Internet, from antique brands to new generation luxury brands.

    "The purchasing power of the Chinese people is very strong. I only have three orders for high quality brands, and I am too busy to fill them."

    Xiao Wu, who studied in the law, also made a part-time purchase in his spare time.

    It is precisely because of the luxury consumption ability of the Chinese people that the electronic business platform has also set eyes on the purse of the Chinese people.

    Tmall launched the world to buy global sales, Amazon launched China direct mail.

    Under such circumstances, the popularity of overseas purchasing and the development of electricity supplier globalization have caused a blow to the sales of luxury goods stores in China.

    Industry experts said that

    Luxury goods

    The market has always been a seller's market, and TNCs decide to maximize profits by implementing different pricing strategies in different regions.

    The Chinese mainland has always been regarded as a primary market, and luxury merchants artificially raise prices by using asymmetric information in the primary market.

    However, with the development of the economy and the diversification of the purchasing channels of luxury goods, the information asymmetry has been broken, and the situation of high price sales of domestic luxury goods is difficult to sustain.


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