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    What Does Gucci Bottom Rebound Mean For The Luxury Sector?

    2016/7/28 22:30:00 46

    GucciRebound In PerformanceLuxury

    It is an indisputable fact that the global luxury industry is in the doldrums. This year it may record a second low growth rate since 2009. However, in the first quarter, the growth of Gucci's counter trend increased the downturn in the luxury sector. It is reported that Gucci grew by 3.1% in the first quarter, while the average growth rate in the same period was 1%. Luxury enterprises do not know enough about the Chinese market, fail to grasp the habits of consumers, and make erroneous decisions frequently. For example, in order to deal with the impact of corruption, they choose to "go to logo", which not only failed to boost their performance, but also resulted in a decline in their performance and damaged the price of the products.

    Gucci's bottom touch has doubled the confidence of the brand. Its CEO even threatened to grow two times the industry's average growth rate in the future, aiming to sell 6 billion euros annually. Compared with Gucci's big strides, competitors appear somewhat lonely, such as Louis Vuitton, Burberry, Dior, etc., instead of growth stagnation or negative growth.

    And three years ago, Gucci was also satiried by the industry as "old design, no consumers, slow growth". Even in the first quarter of 2015, its performance was the worst in five years. After the continued downturn, Gucci carried out self revolution, first of all, the high level of massive exchange of blood, and then the brand repositioning and returning to high-end positioning. In the Chinese market, it was a user anti-corruption policy and drew closer ties with China.

    After repositioning, Gucci Become younger, brighter, brighter and cleaner. The more youthful design has won the young generation of the millennial generation and pulled back the old customers in the 80s and 90s of last century. At the same time, in order to make Gucci return to the high-end line, Gucci reinstalled 34 stores last year, the target is reinstalled 50 this year, next year there are 40-50. In addition to reloading stores, the shops in the low-end market have been abolished, and discount stores and price cutting trends have been reduced. Under various initiatives, Gucci is moving towards a revival step by step.

    In the Chinese market, due to the high pressure of anti-corruption, most luxury brands have fallen into recession. Gucci is no exception. But Gucci is different. It is advocating China's anti-corruption policy, and believes that short-term negative effects will happen, but in the long run it is right. The revival of Gucci will not be easy and time consuming may exceed market expectations, but the brand's initiatives deserve others. Luxury goods It is possible for manufacturers to draw lessons from them and bring them back to growth. However, in the past few years, luxury goods industry has been in the depths of winter, luxury brands have been locked up to save themselves, and exposed problems in the development process.

    Global luxury goods market size The growth rate slowed down, and the growth from the most important Chinese market began to become sluggish. According to the data released by the foresight Industry Research Institute, "2016-2021 years China's luxury industry market demand and investment forecast analysis report", sales of luxury goods in China increased by 30% in 2011, and fell rapidly in the following years, down to 7% in 2012 and only 2% in 2013.

    The failure of luxury goods in the Chinese market is related to the domestic economic slowdown and the increase in anti-corruption efforts. In addition, with the spanformation and upgrading of consumption, consumers began to turn to low-key non famous brands, and the rise of outbound travel boom, domestic and foreign market spreads, product categories and other factors also affected the domestic luxury market. To this end, luxury goods manufacturers began to comb the Chinese market and close down the loss stores. According to incomplete statistics, according to incomplete statistics, in 2013~2015, BURBERRY closed 4 mainland stores, COACH closed 2, Armani 5 home, PRADA fell from 49 to 33, LV closed 3 last year.

    The plight of the luxury sector is complicated. One of them is the rise of overseas purchasing, which has many impact on China's luxury market. With the rise of outbound travel, Chinese consumers have become more inclined to buy luxury goods in overseas markets. There are differences between domestic and foreign products, such as price differentials, types, and so on. In addition, luxury brands have misjudged the consumption potential of two or three line cities. When Chinese consumers are rising, many luxury brands are blindly optimistic, expanding in the two or three tier cities, overestimating the consumption power of the two or three tier cities, resulting in continuous loss of stores and having to close down.


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