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    How To Solve The Problem Of "Rescue The Market" Of Luxury Goods

    2015/4/3 11:40:00 19

    Luxury GoodsPricesMarket Conditions

    The real reason for the sluggish consumption of China's luxury goods market is that more and more consumers choose to cross border purchase through various means, and China's emerging consumer groups are gradually mature, and their demand for fashion and luxury goods is more personalized and rational. According to the Bain consultation report, although the sales in the mainland market dropped, Chinese consumers went abroad to spend a lot of money, including mainland sales, purchasing and outbound purchases. In 2014, the total consumption of luxury goods in China was about 380 billion yuan, up 9% over the same period last year. The scale of luxury shopping market reached 550-750 billion yuan.

    Xu Jing, director of the international brand management center of the China Association of international trade under the Ministry of Commerce, said in an interview with Caixin, that Chinese consumers are flocking to overseas consumption, mainly due to the large price gap, the inconsistent style and trust. Overseas consumption has not only affected the performance of luxury goods group in China, but also attracted the attention of Chinese government departments. The Ministry of commerce is studying and adopting targeted policies and measures to make it possible for Chinese people to buy high-end consumer goods at a reasonable price.

    Xu Jing is one of the participants. The international brand management center has established an overseas direct mining system, signing directly with the world's leading brands to solve the discriminatory price differentials of distributors. At the same time, the principle of "zero price plus tariff" shall be applied to zero profit sales without sale.

    Xu Jing further explained that Chinese people going abroad to "sweep goods" can save 30% to 40% more than that in China. "At present, the high price of luxury goods in China is mainly caused by three factors: first, the price of the distributor is higher than that of other regions; the two is that tariffs and other taxes account for nearly 20% of their prices; the other is the profit requirements of the stores." He said.

    In order to "flatten" the price gap between domestic and international markets, the international brand management center began to communicate with and negotiate with luxury brands 4 years ago. "To guide consumer reflow, it is difficult to cooperate with international luxury brands, difficult to channel, difficult to price, and difficult for consumers to trust." Xu Jing said, "we began to communicate with merchants from all over the world in 2010, which is very difficult."

    According to Xu Jing, before the European financial crisis in 2010, the international first-line luxury brands were reluctant to talk to him about cooperation, and even some leaders from the Ministry of Commerce came to talk about cooperation. "Our turning point was in October 2010, and some Italy brands like Armani and Prada were stuck up first and agreed to supply us. But the price, we have no pricing power, the discount from 15% off, 25% off, to 35% off, until we buy more and more later, from 15% off to 55% off. "

    At the same time, the international brand management center has established a global direct procurement system in Milan, Paris and London. In the Ministry of Commerce's plan, these goods will be sold through shopping centers in several bonded areas throughout the country. Last August, the international brand management center signed an agreement with mangrove resort world to establish a mangrove par luxury center in the Sanya Bay Mangrove resort world.

    "The luxury price of mangrove sales hopes to be able to synchronize with the world in the future." Xu Jing said.

    In the eyes of the industry, this well intentioned "bailout" plan is beset with difficulties. The form of Xu Jing's operation is a "buyer's system", that is, from the discount of the international luxury center, and then directly to the domestic market. Consumer Sale. The risk of buying is due to improper selection of goods, resulting in inventory.

       Yintai department store The luxury of Yintai net is also purchased by "buying system". Tang Nan, senior director of Yintai Department of Yintai department, said, "Yintai started purchasing from Italy in 2011, and the amount can be reduced to a certain extent. But luxury brands will not let you choose, but let you take a set, such as not only luggage, but also the corresponding dress. But China has no habit of consuming dresses, mainly consumer bags.

    Theoretically, "buyers" can set their own prices when they sell luxuries, but Tang Nan said. Price It's not easy either. "The price is neither high nor low. We are self pricing, low priced, consumers say it is fake, how can you sell it cheaper than European retail prices, high and no one bought it." She said.

    Similarly, domestic duty-free shops are also difficult to compete overseas. Xue Feng, director of the commerce and Circulation Department of the Hainan Provincial Department of Commerce, said, "after the implementation of the tax exemption policy in Hainan, we introduced nearly 300 brands of international brands, such as Prada, Cartire, Gucci, Armani, Earl, Rolex, Chopin and so on. The sales of these brands are the best selling stores in Asia Pacific region, but there is still a big gap compared to the growing overseas consumption."

    In 2014, sales of duty-free shops in Hainan, Sanya and Haikou amounted to about 4 billion 330 million yuan. At that time, when designing the tax exemption policy in Hainan, the four ministries and commissions of the Ministry of finance, the General Administration of customs, the State Administration of Taxation and the Ministry of Commerce estimated that the annual sales volume was 30 billion yuan.

    Zhao Ping, deputy director of the Consumer Economics Research Department of the Ministry of Commerce, said in an interview with Caixin reporter that the appreciation of the renminbi has made it cheaper to go out and buy things. The more we buy, the more the proceeds, especially the depreciation of the euro and rouble, have aroused the enthusiasm of overseas shopping.

    The brand's own pricing strategy is more effective than these models. Prior to this, Chanel announced that it would coordinate the price gap in different markets in the world since April 8, 2015. The first adjustment is classic (11.12 and 2.55) and Le Boy Chanel handbag series. In Europe, the price is raised by about 20%, while in the mainland of China, the price is reduced by 20%, which ultimately reduces the price difference in the global market, and the spread will not exceed 5%. Luxury brands should feel an unprecedented chill. In their proud Chinese market, the earnings data released by several listed companies are disappointing.


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