The Trouble Brought By Luxury Price Cuts To Chinese Consumers

In the short term, for Chinese consumers who have already bought luxury goods, Chanel's decision will lead them through a "cold spell", because in the eyes of these people, it is generally considered that luxury investment can be maintained for a long time.

On social networking micro-blog, Chanel's price cut has been on the top of the list of hot topics.

According to the statistics of China Luxury Advisors, 60% of the respondents were against the price cuts.

Chinese consumers also have another feeling that the image of these brands is beginning to suffer as the price of luxury goods is reduced. In the annual report of BrandZ's top 100 list of the most valuable brands in the world, the economic benefits of the 13 largest luxury brands in the world have dropped by 6%, while the other non major brands have fallen by 2%.

The person in charge of the survey said: "

The slowdown in the Chinese government has reduced tariffs on gifts to the global front line.

Had a huge impact. "

More generally, there is another question: will other brands follow up?

Luxury brands are now facing a common problem. Should we adjust the price? Chanel is the vane of the luxury market, and its new pricing strategy has brought a series of troubles to other companies.

Luxury goods expert Martin Cr py: "luxury brands have to avoid one mistake, blindly following this new pricing strategy.

Every company must find its answers when facing the challenges of development. The specific circumstances of its customers and the cognitive value of the brand in China need to be taken into consideration.

Luca Solca, a bank analyst in Paris, France, said in an e-mail: "however, the price restructuring of the major luxury brands is inevitable."

The Patek Philippe and TAG Heuer have long been cutting prices in a wide range of areas. Philippe

The selling price is expected to rise, even if the demand level in the region is relatively weak, mainly to offset the rise of the Chinese market.

Martin Cr py said: "European product prices will to some extent subsidize the decline in China's prices, because even if the maximum import cost, customs and logistics costs are maximally reduced, the gap between the two consumer markets is not enough to maintain the same profit as before."

Finally, the result is that Chanel and other brands become luxury goods in Europe at least. In recent years, the price advantage of Europe will disappear, and the prices of products in these areas will increase by 5%-10%.

Therefore, it will also affect the market of second-hand products.

As early as March this year, Hermes "eternal" products, such as Hermes Kelly bags, resell for more than 2 times.

But the Hermes brand said it did not plan to follow suit and cut prices to maintain its original image of high cooling.