GUCCI Bags Are Not Sold In China. The New Export Red Is Accused Of "Stealing Money".

The attraction of GUCCI to Chinese consumers is less than a year ago. According to a new survey, GUCCI fell out of the top five list of Chinese consumers Dream Bag.

Recently, the Canadian investment bank RBC RBC (Capital Markets) issued a consumer preference survey report. In the report, 750 Chinese consumers with a spending power said they would prefer to buy Chanel, Hermes, Luis Weedon, Prada and Dior brands in the next 12 months. Only 30% of the respondents had the intention to purchase GUCCI bags.

It is worth mentioning that in the survey report released by RBC in April, GUCCI is still in the second place, but now it ranks sixth. Less than half a year, Chinese consumers seem to have had an aesthetic fatigue over GUCCI. Have consumers really changed their minds?

GUCCI can't sell.

GUCCI began to sell, and the latest financial results confirmed this possibility.

At the end of July this year, the GUCCI parent company, France Open Cloud group, released its latest performance. In the first half of this fiscal year, the GUCCI brand recorded an increase of 19.8%, the slowest growth rate in three years compared with the 44% growth in the same period last year. GUCCI sales growth slowed down faster than analysts expected.

Although Jean-Marc Duplaix, chief financial officer of Kai Yun group, has affirmed GUCCI's performance in the Asia Pacific market, especially in the Chinese market, sales growth of 23% in the second quarter has begun to decline compared with 35% in the first quarter. This data is also consistent with changes in consumer preferences in China.

On the other hand, Chinese consumers' concern for GUCCI is also declining. According to fashion business express, GUCCI's search index on Baidu has fallen 30% over the past six months.

Why do Chinese consumers no longer welcome GUCCI?

Liu Chang, chief consumer analyst at Dongxing securities, told China News Weekly that at present, consumers' decisions on luxury consumption are still at a stage of interaction. These include the impact of people, people and marketing, social media, and these combined forces that influence consumer decision making.

The reason why GUCCI fell out of the top five of consumers' willingness to buy brands is that GUCCI's advertising efforts in China have declined. GUCCI's location in the core business circle and the launch of new media (including friends circle) and traditional advertising channels all represent the marketing dynamics of brand in a region. Compared with other brands, GUCCI's marketing intensity has decreased recently, which has affected consumers' consumption intention.

The second reason is the aging of products. Liu Chang believes that Chinese consumers are becoming more and more aware of luxury goods, while GUCCI products lack innovation.

Some netizens said that GUCCI had a problem with its design, "too much Street" or "only one season".

In addition, GUCCI's repeated prices also dissatisfied some consumers. In April this year, GUCCI announced a slight cut in price, but later announced that it would increase the price of some commodities from June 1st, thereby strengthening the brand positioning of luxury goods. In 2018, GUCCI also made a round of price rises, with a price range of 4%-10%.

Some consumers said on the Internet that in the face of GUCCI prices, the same budget has more choices.

Performance ride roller coaster

The attitude of Chinese consumers is very important to GUCCI.

In April this year, Kai Yun group released a report that the group's annual sales performance was strong in 2018, which was mainly boosted by the growth of Chinese consumer demand and the success of its brand GUCCI marketing.

In 2018, Kai Yun group achieved two digit growth in all regions of the world, with sales in North America increasing by 38% over the same period last year, and sales in the Asia Pacific region increased by 34% over the same period last year.

The performance crisis is not the first GUCCI experience. GUCCI faced this problem 5 years ago. At that time, GUCCI was not a strong agent for the group. Since 2014, GUCCI's performance has started to decline. In the current report, GUCCI's operating profit dropped by 6.7%, and its profits fell. This situation extended to 2015, and its operating profit fell again in the first quarter.

In 2015, GUCCI, who was anxious to recover, began a discount sale. In the summer of that year, GUCCI launched its first ever discount sale season in Beijing, Shanghai and other places, many of which are directly 50 percent off. When the outside world hasn't recovered from shock, GUCCI's winter promotion season is coming again.

Marco Bizzarri, the chief executive in the mire of price, appointed Alessandro Michele as creative director in 2015, which changed the style of GUCCI.

Alessandro Michele reshaped the brand connotation, and used street graffiti and animal and plant totems in shoes, fashion, luggage and bags. At that time, although GUCCI had received an evaluation similar to "exaggeration" and "too retro", GUCCI's image has been completely new.

Chinese consumers have become an important support for GUCCI's resurgence. According to Deutsche Bank's data, China's market accounted for 31% of global luxury demand in 2017 and 1/3 by 2020.

In 2017, the whole group achieved an astonishing growth by relying on its GUCCI brand. According to the financial report, GUCCI's annual sales account for 40% of the total revenue of the whole group.

Because of this, once Chinese consumers' interest in GUCCI decreases, the impact on GUCCI is not small.

The performance once again took the roller coaster, and the outside began to talk about whether the curse of "GUCCI red for three years" is to be fulfilled, so GUCCI has to manufacture new weapons.

Lipstick monthly sales of millions

One of the highlights of GUCCI this year is make-up.

In May 4th this year, GUCCI launched a brand new lipstick series and was promoted in the Americas, Europe, Southeast Asia, China, the Middle East and Australia. In November 2014, GUCCI worked with Procter & Gamble to launch a series of cosmetic products. But P & G sold beauty business in 2016, and GUCCI's make-up products entered a dormant period.

This year, GUCCI is working with the beauty giant Coty group to re-enter the make-up area.

However, when the new GUCCI product was launched, it was the exaggerated advertisement that was first talked about by the outside world. GUCCI lipstick ads are different from traditional beauty ads. They choose faces and mouth imperfections and write close-up to convey the concept of "bold, bright and beautiful".

The advertisement not only brought great discussion to GUCCI, but also made consumers curious and buying desire for GUCCI lipstick. Recently, Coty group CEO Pierre Laubies revealed at the Barclays global consumer conference that GUCCI lipsticks sold about 1000000 in the first month of the launch, while Asian shops sold only 33 thousand in a day. Of these, 55% of sales came from online channels.

GUCCI has also received the attention of Chinese consumers. There are 19 thousand related notes on the social networking platform Xiao Hong book, with users saying, "GUCCI finally came to steal money!"

At the same time, many users began to test colors and Amway after purchase. Judging from social media, GUCCI lipstick is currently highly rated.

For GUCCI lipstick success, Liu Chang believes that first of all, the product is excellent. Secondly, luxury brands enter the field of make-up, lipstick is the most breakable product, for example, YSL has been successful through lipstick. Lipstick is the first commodity for all female consumers to reach luxury goods. In the end, GUCCI did almost all the marketing.

The above points made GUCCI test water lipstick successful.

But whether lipstick can drive GUCCI into other makeup fields remains to be seen.

Liu Chang believes that if GUCCI needs to continue to make efforts in the field of make-up, first of all, it needs to keep consumers' enthusiasm for GUCCI lipstick, and then expand products to develop other cosmetic products. The most important point is continuous marketing. From the experience of YSL, GUCCI needs at least two to three years of marketing for make-up products, so that the concept of cosmetics brand GUCCI will penetrate into consumers' minds.

Whether it is make-up or traditional clothing, leather goods business, luxury brands need to keep consumers concerned and purchase desire, in order to get rid of the curse of "red but three years". Liu Chang said luxury brands need to make efforts in three aspects: product, marketing and innovation, so as to retain consumers.