Chanel Has Problems In The Chinese Market And Its Prospects Are Worrying.

To date, China's

The weakening of consumption power has been partly offset by the strong overseas consumption of Chinese tourists, especially in Japan and Europe, which will seriously cause domestic shops to fall into the role of exhibition hall.

Since the end of last year, luxury brands have begun to integrate stores in China, and have planned to close stores or slow down the launch of their shop plans.

Some analysts pointed out that in parallel markets, purchasing agents are squeezing solid store performance.

In order to balance the price difference,

Chanel started in April 8th last year in China.

The price of the product is reduced.

Leading to a sharp fall in China's prices and a sharp rise in European pricing, and behind this is to crack down on the purchasing market. Chanel fashion President Bruno Pavlovsky confirmed the intention behind yesterday's interview with Reuters in Havana, Cuba.

Bruno Pavlovsky told Reuters in Havana landmark Teatro that despite the success of curbing gray market sales, Chanel's revenue growth will slow this year, but he declined to give specific figures.

He pointed out that Chanel has a complete team, including external lawyers to test the two tier market, that is, the crazy buying market in recent years.

In the past few months, the luxury industry has been beset by the decline in global tourism flows, mainly because the recent Belgian Brussels bombings and the Paris terrorist attacks, China's economic slowdown and record low oil prices have led to a decline in the purchasing power of extravagant buyers in Russia and the Middle East.

In April of this year, LVMH group, a luxury goods leader, said its sales of fashion and leather products had stagnated, while Hermes said its revenue growth slowed in the first quarter.

Bruno Pavlovsky said that because of the lower rouble, fewer Russians traveled abroad, and the recession in Brazil also inhibited local shopping demand.

But Chanel said its performance in the US region and parts of Europe, such as the UK, Russia, China, Japan and South Korea, has shown steady growth.

The Chinese and Russians do not travel abroad, but they will buy them locally. It has already proved that Chanel has done a good job in fighting against purchasing.

Bruno Pavlovsky revealed: "performance is indeed showing signs of slowing down, but it is not a very big slide."

Although Chanel claims to have defeated the purchasing market, some analysts said earlier that Chanel had problems in the Chinese market and its prospects were worrying.

Exane BNP Paribas analyst Luca Solca said Chanel was not surprised by the departure of the former CEO Maureen Chiquet, because Chanel had made a mistake in the Chinese market.

Last year, Chanel was the first luxury brand to adopt price cuts because of China's foreign exchange and tariff gap.

Luca Solca points out: "Chanel brand seems to have been overexposed, and recent price adjustment measures seem to further exacerbate this problem."

At the beginning of 2015, under the predicament of continuous recession, Chanel, which consistently maintained the high-end route and the highest priced Asian region, began to adjust its marketing mode.

At the beginning of last year, Chanel cut 20% in the Chinese market. Taking the strategy of global market parity, it gave the whole luxury industry a feeling of consternation, and a wave of price cutting swept across the luxury sector.

Maureen Chiquet has said that for Chanel's marketing strategy, we should not think about how big it can be, but consider how to make it unique.

China wants consumers to buy luxury goods at home instead of abroad.

According to Reuters's earlier news, China has begun to increase tariffs on overseas orders, and has stepped up efforts to crack down on luxury goods carried in suitcases. In addition, China has stepped up the regulation of overseas use of UnionPay cards. Since January, the withdrawal limit of each card in overseas teller machines has been limited to 100 thousand yuan.

Through these measures, China encourages consumers to spend at home and crack down on the gray luxury goods market which evade Customs duties.

Although Chinese consumers contribute 1/3 of the global luxury goods sales, only 1/5 of the pactions actually took place in mainland China. The rest of the pactions took place overseas, including orders from overseas websites, Chinese travel shopping or overseas purchases.

A senior developer in Hongkong who specializes in shopping malls in the mainland said last year that some top executives of luxury brands had visited Beijing to discuss how to join the government in combating purchasing.

"Luxury brands are not worried about economic slowdown or anti-corruption," the executive said.

Taking into account the expansion of the middle class, the level of personal spending is not bad, they are worried about purchasing, because buying and selling disrupts the supply and pricing mechanism of luxury brands.

Buyers buy products overseas, and then sell them to mainland customers to make profits.

They usually avoid customs duties through various channels to save costs.

One of the main commodities purchased is luxury goods.

A report by Bain, a consulting firm, points out that in the 2014 year of the year, the scale of luxury shopping industry is between 55 billion and 75 billion yuan, almost half of the sales of luxury brand stores in the mainland.