Tax Reduction Benefits Domestic Luxury Industry

Following the tariff reduction of some imported products in June 2015, in early January 2016, the government further expanded the scope of tax reduction for imported commodities and lowered the provisional tariff rate of 16 consumer goods, including luggage, clothing, scarves, stalls, vacuum thermos cups and sunglasses.

For the significance of this tariff reduction, CEO Sun Yafei, a luxury electric supplier of Fifth Avenue, believes that the reduction of tariffs is not aimed at cross-border e-commerce, but is aimed at a large number of overseas shoppers.

In fact, in 2014, only 500 billion yuan was purchased overseas by Chinese consumers in the luxury sector, while the total amount of luxury goods purchased in China was only 180 billion yuan, she pointed out.

Among them, the main reason for this group of people to go shopping abroad is the international price difference. The luxury import tax is about 30% to 50%, plus

The split means a doubling of sales in the domestic market.

Sun Yafei thinks

At present, it can be divided into two categories:

The first category: China does not import goods from abroad.

The second category: domestic goods, purchased from other sources abroad, get lower.

We can make profits by lowering prices.

Sun Yafei pointed out that since the tariff has dropped, the brand side will also reduce the price, which will have a greater impact on the second types of cross-border electricity providers, because most of these types of businesses are purchasing agents on the C2C, who themselves earn the price difference between overseas and domestic, and domestic prices are falling, and their profits will inevitably decrease.

"For the first category of businesses, the impact is not, but has a catalytic effect.

The tariff increases, and consumers stay at home to buy things, which can stimulate domestic consumption environment, and such cross-border electricity providers will also be promoted.

Sun Yafei said.

"When the Chinese do not spend all their domestic consumption overseas, the domestic consumption environment will become worse. The Chinese agent of the brand will also cancel the agency because it can not complete the sales task, and the brand will hardly be profitable and will close the Chinese shop."

Sun Yafei said, "when the tariff decreases, the brand side will have a reason to reduce the price in the domestic market.

In this way, China's consumption can be left at home.

In fact, since China began to lower tariffs on some imported products in June last year, major luxury brands have also implemented a "price reduction" strategy in China.

At the end of July 2015, luxury brand Prada announced price adjustment to many regions including China, and clothing, luggage and other main commodities were in the price adjustment.

In addition, the international brands of Shiseido, SK-II and L'OREAL have also been cut down one after another.

South Korea's cosmetics SKINFOOD has even cut its price range by more than 40%.