Luxury Marketing: Exchange Rate Is A Natural Disaster.

Most luxury companies find that although most of their costs are denominated in euros, they have at most 80% of their income in other currencies.

Exchange rate fluctuations often cause global migration of customers, and also make the performance figures of luxury brands hard to control.

When the purchasing power of RMB increases, it will encourage consumers to turn to overseas consumption and affect the domestic luxury goods market. After that, Chanel adjusted the price to eliminate the spread.

Secondly, the cost items of luxury goods are also important in any country. If the foundry happens in China, the appreciation of the renminbi will increase the cost.

The depreciation of the main market of luxury goods will shrink the company's income.

Many companies will calculate their own financial data according to the fixed exchange rate and the variable exchange rate, and make some profits easily, which may be swallowed up by the exchange rate.

Do you really want to pick up gold in the BRICs?

The BRICs, made up of Brazil, Russia, India and China, are often seen as the hope of the world economy.

In the eyes of luxury goods, these countries also have aureate auras for a long time.

After all, rapid growth will inevitably bring more new rich people and expand the middle class. Since beauty is the natural instinct of all mankind, they will open their wallet.

However, some of the luxury brands entering these countries have already got bogged down in the mire.

China

In 2014, the core profit of LVMH group dropped from 602 million euros in 2013 to 572 million euros, down 5% from the same period last year.

The Asia Pacific market has the worst performance, and China's continued vigorous anti-corruption has suppressed demand for high-end buyers, while Hongkong's slide is even more significant.

Consumers in the Greater China market have gradually got rid of the "show off period" and entered the stage where they need to express their individuality.

Big logo is no longer popular, and people are starting to chase small luxury brands.

First tier cities, the newer middle class with higher education is the first to change, and the consumer ideas of the three or four tier cities are becoming more mature.

Russia's 2014 Ukraine crisis, western economic sanctions, oil prices fell, the ruble depreciated more than 40%, so that Russian travel consumption dropped to freezing point, leading to the arrival of Russian travel shopping peak.

Russia's economic model is fragile and highly dependent on energy exports.

The fall in international oil prices will have a serious impact on them, which will further impact the luxury industry.

Russia's population structure has led to serious aging.

By 2030, the number of people over 65 who will earn more than $150 thousand will account for 18%, while those aged 40-44 will only account for 14%.

India has huge population and rapid economic development, and is expected to be the next China.

In terms of the current situation, India's luxury consumption is still less than China's 1/102009 figure is 600 million euros (and China is 6 billion 600 million euros), accounting for only 5% of the total global luxury consumption.

The harsh caste system in India has made it difficult to cross the social class and difficult to generate new middle class. Religious culture is powerful, and most formal occasions Indians still wear traditional ethnic costumes.

According to a survey report, among the luxury brands most wanted by India citizens, the first and second of them were high-end traditional garments Sari brands.

The gap between the rich and the poor in India is serious, so it is still very few to consume luxury goods. India's backward infrastructure, widespread corruption, too cumbersome business processes and shortages of technology and other commercial environment make it impossible for Luxury Retailing to operate efficiently in India.

Brazil is the richest country in South America.

According to the annual global wealth report released by Merrill Lynch and Capgemini, the number of millions of millionaires in Brazil has maintained a sustained growth momentum.

Due to the impact of the financial crisis, the wealth of the wealthy in Brazil has shrunk.

At present, the luxury market is only developed in three main cities, such as Rio De Janeiro, Brasilia and St Paul, and the second tier cities have not yet been developed.

Brazil is a young country. Young people under 29 account for 60% of the population.

This has created a feature of luxury consumption in Brazil, which is the consumer's habit of buying luxury goods by installment.

Even if consumers have the ability to pay the goods at once, they are still accustomed to paying in installments.

But this has also led to credit risks.

In addition, Brazil's high operating costs and import tariffs lead to the same handbag price in St Paul at least 50% higher than in New York.

Luxury goods? This may be the most exquisite and respectable business in the world. However, there is probably more than one Rupert in the world tossing and turning in the night.