The Prada Of Luxury Goods: Bad Market Environment And Bad Quality.

Downturn, decline, price reduction.

Since 2013, trying to get rid of these dark labels has been futile.

Like many luxury brands, it will focus on the Hong Kong and Macao markets which are not strong enough.

Besides the market environment that does not give strength, product quality is also Prada's bruising.

This is a Milan based company.

In August 7th, the manufacturer announced its first half performance in 2015: Prada sales rose by 4% over the six months to July 31st, to 1 billion 820 million euros (about 12 billion 357 million yuan), less than that of Bloomberg analysts.

Part of the reason is that demand for handbags and wallets has continued to weaken in areas such as Hongkong and Macao.

Prada did not provide data in the Asia Pacific region, but indicated that there was a similar negative trend in the most important market in the first quarter.

Recalling the report cards handed down by the group in June this year: profits fell by 23.9%, and operating income plummeted by 42%.

When we first went to Hongkong to list, the Chinese market is OK.

In 2006, a popular film called "Queen Prada wearing" brought the Italy brand into the cognitive circle of China's general public.

As a result, when Prada went through 4 attempts at listing in Europe, it finally chose the Hongkong stock exchange to be listed in June 2011.

It was a great discussion at that time, because it was the first luxury company listed in Hongkong.

Prada chief executive Patrizio Bertelli told reporters in an interview that he clearly stated the purpose: "

The location actually represents the market we want to go to.

Prada CEO Patrizio Bertelli (left) and President Miuccia Prada

Listing in Hongkong at that time did seem a good choice.

The annual China Luxury Market Research Report released by consulting firm Bain showed that with the increase of disposable income and the growth of high net worth, wealthy families and middle class, the growth of luxury consumption in mainland China in 2011 was expected to reach 25%-30%.

It's hard to make money without fanaticism.

In 2012, at the peak of Prada, the group's global profits surged 44.8% to 625 million euros (4 billion 254 million yuan) over the same period last year. Sales of 130 stores in the Asia Pacific region (28% of the world's stores) broke through the one billion euro mark for the first time, reaching 1 billion 160 million euros (about 7 billion 895 million yuan), and the proportion in global revenue rose to 35.6%.

But then it was a great turn for the worse.

At this point, the danger has begun to surface. Bain's 2012 luxury market report shows that the annual growth rate of luxury goods in mainland China has decreased to around 7%.

Under the combined effect of the two factors, the continued decline of the euro and the warming of overseas travel, Chinese consumers have accounted for 60% of the total consumption of luxury goods overseas.

Although Chinese consumption growth in Macao is still strong, the growth rate in Hongkong has slowed to 10%.

Prada barely recorded a 0.3% profit growth in 2013, and the group's revenue rose by 8.8% under the promotion of 79 new stores in the world.

The Asia Pacific region opened 27 new stores, and the net sales increased by 11.4% compared to the same period last year (35.6% in 2012).

China's luxury market, which has been growing rapidly for many years, first appeared -1% negative growth for the first time in 2014 due to the slowdown in economic growth, the role of corruption and so on.

Bain survey shows that more and more Chinese consumers choose to travel to Japan and South Korea for shopping.

As of April last year, the value of sales of jewellery, clocks and gifts in Hongkong declined by 39.9% compared with the same period last year.

Prada this Italy luxury brand also met Waterloo in 2014.

Profits fell by 28.2% year-on-year, while sales in the Asia Pacific region shrank by 3.1%, and global sales dropped from 36.4% in 2013 to 35.7%.

The radical expansion policy was thrown aside. In the middle of 2014, the number of new outlets in the Asia Pacific region was only 18, the smallest in 3 years.

The environment is not good, but the quality of products is also hard.

If all these are caused by the big environment, the quality problem that Prada has criticized in recent years is its unyielding bruising.

Prior to its listing in 2011, Goldman Sachs put Prada on the table with many factories in mainland China.

This quality risk factor has not hinders the listing of Prada. Although most people are not new to this "secret", more buyers are only concerned about the "Made in Italy" logo on the bag, even though it means only a suture or a zipper.

However, the quality problem that some Chinese consumers take the Prada into a cold haven finally came.

In June, the Beijing industry and Commerce Bureau conducted a spot check. Among the 95 of the unqualified products, there was a Prada name.

Through Baidu search, the negative news of "Prada fade", "Prada offline" and "Prada zipper" can be found everywhere.

Just imagine, when you walk on the road with a Prada handbag that costs more than five thousand yuan, suddenly the handle is broken, and all the belongings inside the bag are out of the bag. This scene is embarrassing enough.

In the first quarter of this year, the ugly performance report again touched the nerves of investors. Prada Hongkong's stock price plummeted to the freezing point of 3 years, and many investment banks lowered their rating and target price.

In the face of the sluggish Hong Kong and Macao market, Prada has tried to reduce the number of shops in addition to reducing the carrying capacity of the 1000 euro -1200 euro (about 6790 yuan to 8148 yuan).

Not only that, the luxury brand in Italy also used a killer trick to quietly reduce prices in Hongkong and Macao.

The price of Prada 80% is down 10%, and the Miu Miu part of the unified group has been reduced by hundreds to thousands of yuan.

This may be a way for Chanel to try to reduce overseas purchasing, but also to wait for Prada to solve these problems.