Cox'S "Light Luxury Road" Is Becoming More And More Difficult In China.

One side is the luxury brand image in the Chinese market, the other is in the United States. market The gradual decline. Cox Chi brand The development of the road is not smooth sailing. The price difference between China and the United States is more than 40%, which was criticized for 5 years ago. In recent years, with the deepening of Chinese consumers' understanding of traditional luxury goods and the change of social environment such as anti-corruption and outbound travel, the "light luxury" road in China has become more and more difficult.

Though COACH is regarded by domestic consumers. Luxury goods But in the US, it has nothing to do with big names. With the rapid development of the electricity supplier and the increasing opportunities for Chinese people to go abroad, the brand image of the company is being tested.

Recently, a reporter has learned that the big price gap between China and the United States is the main factor that leads to domestic panic buying, and the other reason is related to the consumption of public funds. In the past ten years, the consumption of public funds is an unavoidable topic in many factors that support the development of luxury goods industry. But with the restriction of the three public consumption policies, it is almost impossible to return to the so-called "brilliant" era.

Zhou Ting, the dean of the Research Institute, believes that although the first few years in the past years had caught the immature consumer market and the consumer psychology of "buying luxury goods at a low price", but with the increase of the Chinese income and the upgrading of consumption, the brand did not conform to the traditional definition of luxury goods.

A huge price gap between Chinese and us

In the United States, she is a purchasing agent. She told reporters that in the United States, about 1000 yuan will be able to buy a Cox bag, which is the price that many people can afford. But in the United States generally sell 1200 yuan to 1300 yuan in the same bag, in the country, even in Ortles also sell to 2700 yuan to 2800 yuan. It is precisely because of the price gap that many people in China choose to buy or buy overseas.

As early as April this year, the Chicago fashion outlets outlets launched a special sale on 7 to 9 pm, and relaxed the restriction policy. Chinese buyers are also not to be outdone. They never go to the Dragon shop outside the shop until 6.

In the two hours, the broom sweeps the tens of thousands of goods in the store, which makes Chicago surprised by the consumption ability of mainland tourists. According to the on-site purchase of more than 90 leather items, "Xuan Ma" said that the sale would see only one white person, one Mexican, and the rest were Chinese buyers. Hom Ma said that the sale would cost her 10 thousand yuan in two hours, and during ordinary times, she would spend 2000 to 3000 yuan per week on the average.

Actually, it has been very popular in the mainland of China. Public media sources said that at the end of 3, the company sold a frenzy discount in Beijing ole market, and 2 of the goods sold over the quarter. Hundred yuan shoes, thousand yuan package trigger consumer looting. And on the eve of the opening of the door, nutchi placed a long dragon in the cabinet of yansa ole.

However, the nutmeg in ootles, even after the discount, was "very expensive", as the reporter saw in oorse of Lufthansa, nutchi's old goods were sold at 80 percent off, and the new style even appeared 50 percent off.

However, foreigners are much more calm than the Chinese people. According to the news, New York bilingual host and Jiao Zi media co-founder Wang said earlier, the Americans did not say that the similar sale would not catch a cold. Instead, they did not catch some brands such as CK, Levi's and so on. These brands were not related to big brands in the United States. In the United States, "black Friday", many Chinese people rush to buy such a brand. Many Americans feel puzzled and don't understand why Chinese people like this brand.

Setbacks in building luxury goods in China

According to the research and analysis of the Research Institute, the success of the company is the success of the "first tier brand image plus excellent quality + cheap" which allows more consumers to accept the price. In an interview with reporters, Zhou Ting said that the success of the company in the past few years was indeed the psychology of the immature luxury market and consumers' "buying luxury goods at a low price".

However, as Chinese incomes and consumption have generally escalated, electricity providers have been developing rapidly in recent years, and the opportunities for Chinese people to go abroad are increasing. They soon find that the brand does not conform to the traditional definition of luxury goods. In addition, with the continuation of anti-corruption and the increasing number of overseas tourists, Kou Chi and so on are luxury goods in China.

Public information shows that after its entry into the Chinese market in 2008, its global sales continued to climb, and its growth rate maintained double-digit growth. But since 2013, the sales growth rate of luxury goods has dropped to a single digit for the first time, due to the "three public consumption" in the winter, and only 2014 in the 2014 year, the 5.3% negative growth.

However, from the perspective of regional sales, the North American market, as the base of the company, has been playing a leading role even though its stamina is not enough. The growth of its new interests is in Asia, especially in the Chinese market. Data show that since 2008, the sales growth rate of the company has reached an average annual growth rate of 42%.

In the first three quarters of 2016, sales in China increased by 2% year-on-year.

Bain's "2015 year old China luxury market research", released recently, shows that the luxury goods linked to business gifts have been hit hard for two consecutive years, thanks to the subsequent impact of anti-corruption. "Many factors that support the development of luxury goods industry in the past ten years include consumption of public funds. When the external environment changes, it is almost impossible to go back to the so-called" brilliant era ". Rhodes, senior vice president of public relations and general manager of luxury business in China, said in an interview with reporters: "the industry in the future will come from the middle class in China. Their incomes are higher than those of ordinary white-collar workers, but they have not yet achieved financial freedom."

Besides, with the increase of outbound tourism, more Chinese consumers choose to buy luxury goods abroad, which also makes pressure on luxury stores in China. According to the 2015 China luxury report released in November 24th last year by the Fortune Research Institute, the consumption of luxury goods by Chinese consumers reached US $91 billion in 2015, that is, 78% of luxury consumption occurred overseas, and the situation of consumption outflow was still serious. According to the survey, the difference between the domestic and overseas watches is the highest among all luxuries. The highest price difference of watches can reach 89%, while the average price difference of liquor is the largest, reaching 64%. However, compared to 2011, the difference in luxury prices between domestic and overseas has significantly narrowed, from an average of about 50% before, to a price difference of 20%~30% between 2015. This is significantly related to the policy of the Chinese government to further reduce import tariffs in recent years.

Want to use "promotion + layoffs" to restore the declining trend

Of course, its sales promotion strategy is not only in its own home, but also in its sales promotion activities in China. Moreover, in order to boost profits, the company also cuts down the cost of manpower at the senior level, hoping to restore the declining trend.

According to press reports, in March this year, the company sold a frenzy discount in Beijing ole market, and 2 of the goods sold in the past quarter were sold. Hundred yuan shoes, thousand yuan package trigger consumer looting.

In fact, not only overseas discount, but also in the country began a crazy discount road. In the past few years, anti-corruption, domestic and foreign price differentials, overseas shopping extravagance, and electric business shock...... Because of these commonplace reasons, many luxury brands were not comfortable in 2015. As a matter of fact, the above is only a superficial reason. Nowadays, with the slowdown of economic growth, many luxury brands rely heavily on single market, and the problems of poor globalization and poor risk tolerance are exposed. According to the annual report, the sales in the third quarter of 2015 dropped from 1 billion 100 million US dollars to 929 million US dollars, down 15%, and 12% in the fourth quarter.

In order to reverse the decline, he has also been using various means of cost cutting to protect himself: reconstructing the physical stores, reducing the discount rate and discount frequency, and hiring Stuart Vevers as the new creative director. The brand also launched a new series of "1941" in September fashion week to restate its unique style of fashion.

He hopes to reverse the situation through this series of behaviors. After ten quarters of reform, its earnings report finally recovered slightly. In the third quarter 2016 earnings report, the brand's net sales amounted to US $1 billion 30 million, an increase of 11.2% over the same period last year of US $929 million 300 thousand.

In addition to discounts and promotions, the company consolidated its financial results by reducing manpower costs. In the near future, President and chief operating officer of Gebhard Rainer, and David Duplantis, President of global marketing, digital marketing and customer experience, will quit. The former president of North America, Andre Cohen, will be promoted to the North American and global marketing director, and the former chief executive, legal adviser and Secretary Todd Kahn will increase the title of the group president.

At the same time, Cox group also proposed the "operational efficiency enhancement plan" to enhance organizational efficiency, update core technology platform and optimize the supply chain network to better cope with the rapidly changing global market situation, fluctuating tourism consumption and increasingly fierce competition environment. The plan to reduce corporate jobs in the global market will generate about 65 million ~8000 million pre tax expenses, which will be reflected in the financial statements from the fourth quarter and are expected to be completed in the end of 2017 fiscal year. In the earnings report, the group did not disclose the size of the layoffs.

Victor Luis, the chief executive of the company, pointed out in the earnings report that the three quarter of "the growth of the brand of the company" was embodied in the core North American market. In the three quarter of March 26th, although its sales in the same store increased to zero, it had been improved for fourth consecutive quarters. It also terminated the 3 consecutive decline in the past 3 years. It was also far ahead of Consensus Metrix. The combined sales forecast dropped 1.4%, while the same store sales in the two quarter dropped 22%, compared with 23% in the same period last year. Brand sales in North America amounted to $499 million, an annual increase of 1.2% and a constant exchange rate increase of 2%. Victor Luis revealed that the performance of retail stores and special stores in North America continued to improve compared with the holiday season, and the brand was resuming its same store sales growth in the current fourth quarter as planned, and rebounded to profitability.