From Chanel To LV, Luxury Prices Are Rising Again.

International luxury brands once again raised the tide of price rise. A few days ago, reporters learned that the French luxury brand Louis Vuitton (LV) raised the price of most of its products by about 5%. Not long ago, Chanel also adjusted some of its product prices by about 10%. The price of high-end luxury goods has been growing steadily since last year, and the price hike has become a routine rule in the industry, but the main reason for this increase is demand growth, said Chai Li, a fashion designer and brand consultant of Italy international fashion week.

　 LV rises by about 5%.

Reporters from LV official website found that some of its products have risen in price. Among them, Bumbag rose from 11100 yuan to 12100 yuan, or about 9%; Palm Springs rose from 14000 yuan to 14600 yuan, or about 4%; speedy25 rose from 10900 yuan to 11800 yuan, or about 8%.

On the grounds of price rise, the reporter called LV official customer service to learn that the price increase is an official routine adjustment, and each price increase is different. In addition, the customer service also said that near the end of the year, consumers are advised to purchase the intended products as early as possible, and many products will often be out of stock at the end of the year.

Besides the price changes in China, the price of LV in Korea has also risen generally recently. Public reports show that luxury brands such as bags, watches and jewellery all over the world are raising the price of their products in the Korean market. LV will raise the price of its popular products in Korea by 4%-7%, which is the second rise of LV in Korea. In April this year, LV increased the price of some products by an average of 3%. In 2018, LV rose three times in Korea.

For luxury brands, it is customary to adjust prices first, then rise and balance international prices. It is understood that around March this year, in response to the value-added tax reduction policy, luxury brands such as LV and Gucci have been cut in China. Among them, LV has lowered the product price of China's official website by the end of March, a decrease of about 3%. Reporters found that even with a 3% decline, the official price of handbags in China is still higher than the official European price and purchasing channels. Industry insiders say that the global price integration of luxury goods has become a trend. The brand hopes to achieve the same global price and narrow the price gap at home and abroad, thereby promoting the return of consumption.

　 International brand promotion

LV is not the brand that takes the lead in rising prices. Since October 31st, Chanel has been adjusting prices globally, depending on specific products. Take a medium Chanel classic sheepskin flip chain package as an example, after the price adjustment, the price will be 37000 yuan, after which the price will be about 33000 yuan, and the price increase will be close to 4000 yuan. Chanel after the global adjustment price is almost flat with the official price, the purchasing advantage is not obvious.

For the reasons for the rise in the price of Chanel, the salesperson of Chanel China World Trade Center store said that not only Chanel, but also the price adjustment of luxury goods every year. This is mainly based on the increase of raw materials and labor costs of goods, and at the same time, because of the recent fluctuation of international exchange rate, the price adjustment of Chanel has been affected. At the same time, the sales staff said that another major reason for the price adjustment is the universal adjustment of global prices. Chanel needs to coordinate the price unification around the world. After the adjustment of other stores in the world, the Chinese market has carried out price adjustment and synchronized with international prices.

In addition to high-end luxury goods, light luxury brands are also starting to raise prices. Not long ago, the Beijing business daily visited a number of Coach stores in Beijing, and found that most of the bags and garments increased by about 10% except the new ones. There was hardly any commodity under 4000 yuan in the shop. The Coach price rises for mainland China stores. Tmall flagship store customer service said that the goods in flagship store were sold at the unified retail price in the mainland. Due to the price rise of raw materials and the change of global currency exchange rate, some commodities in Coach were adjusted, so that the goods purchased by consumers would be more value preserved.

The promotion of labor costs, logistics and opening stores is a general explanation for luxury goods. Zhou Ting, President of the luxury goods field and the Research Institute of customers, believes that there are two main reasons for the increase in the price of luxury goods: one is the regular price increase to create the impression of keeping value; the two is that the changes in raw material prices and exchange rates have increased the cost of products; in the trend of global price integration, the promotion strategy of its real brand has little significance in enhancing brand value.

　 Demand linked gains

"With the increasing number of luxury customers, demand is also growing. This is also the foundation of value preservation, value added and price increase of luxury brands. If there is no strong demand, the brand will moderately lower prices or maintain a stable price according to the performance of big data. Apart from the rising cost of raw materials, labour and shops, Chai also gave another reason.

Based on the huge demand, the Chinese market has now become a bonus place for luxury goods. According to McKinsey China's 2019 report on China's luxury goods consumption, in 2018, Chinese luxury goods consumption at home and abroad reached 770 billion yuan, accounting for 1/3 of the total global luxury consumption. The average household consumption of luxury goods expenditure was nearly 80 thousand yuan for luxury goods.

In addition, the younger generation represented the "80 generation" and "90 generation" accounted for 43% and 28% of the total number of luxury goods buyers, respectively, contributing 56% and 23% of the total consumption of luxury goods in China. In terms of per capita expenditure, the "post-80" luxury consumers spend 41 thousand yuan on luxury goods every year, and the "post-90s" luxury consumers are 25 thousand yuan per year.

Chai Li said that the big data of each brand are different, so the price range is different. The general range is about 5% of the original price, which is a normal phenomenon. However, the price increase of luxury brands will not affect consumers whether to continue to buy, because luxury customers rarely calculate the price, more focus on the brand's product value and connotation.

Similarly, Zhang Mengxia, director of the China luxury Research Center at University of International Business and Economics, told reporters that the price adjustment of the brand must be based on big data. The major brands now use the social media to do the market and have accumulated some experience. Its CRM system is linked to sales. If a large number of data is obtained, the fixed customer group can accept the risk of price increase. This action is operable.