Consumption Level Upgrade LV Sold 350 Billion In A Year

When it comes to the three words of luxury, many people may feel that they are far from extravagant jewelry, and that they can buy some well-known brands in daily life. This is not to say that many people do not pursue, but that the price of international luxury goods is too high, and is not a daily necessities. But even so, many people still want to own one or two luxury goods, because luxury represents wealth, content and taste. For this reason, although the market for luxury goods is smaller than that of other consumer goods, it has huge potential and higher profits.

Relevant data show that in 2019, the global luxury jewelry market grew by 6% over the same period last year, with a market share of 260 billion euros, or about 1 trillion and 960 billion yuan. In addition, the scale of the market is growing at a rate of 3% to 5% per year. At present, China and the rest of East Asia are still the main consumer market of luxury goods. This is well understood because East Asia is densely populated and relatively developed economically, leaving aside Japan and South Korea. China alone accounts for 9% of global luxury sales. In 2018, Chinese spending on luxury goods reached $145 billion 700 million, an increase of 7% over 2017. Extravagant consumption of extravagant jewelry (Chinese luxury goods purchased abroad) was $107 billion 300 million, an increase of 4% over 2017. Domestic luxury goods consumption is 38 billion 400 million US dollars, up 17% compared with 2017. It is easy to see from the Chinese people's consumption ability in luxury goods that China's economy is prosperous and strong and the per capita income is generally promoted.

However, although the consumption level of luxury goods in China is very high, the problem of consumption outflow is very serious. Over 70% of luxury goods transactions occur in overseas markets. Of course, the reasons for this phenomenon are varied, but the main reason is that most of these luxury brands are from abroad. Data show that in 2018, the best luxury brand in the world was Louis Weedon, who had 165 years of history, followed by Chanel, Hermes, GUCCI, Cartire and Dior. Among them, the second place Chanel and LV, compared with 57 billion sales, indicating that LV is still the leader in the global luxury market.

In 2018, the sales volume of LV single brand was about 75 billion yuan. Chanel's sales volume was about 66 billion 800 million yuan, Gucci was 60 billion 500 million, and Hermes was 38 billion 800 million. From these data, we can see that in the luxury industry, there is no brand that can compete with LV for the first time. The reason why LV is leading many other luxury brands is closely related to its "Buddha system" attitude. Since 1870, a large number of LV imitations have appeared in the market, but LV has not investigated them. LV's management believes that no matter how many copycat LV they buy, once they really have the spending power, they will definitely buy the genuine LV. Obviously, LV's management has deep insight into human nature besides its trust in its products.

In 1988, LV merged two other luxury brands and set up LVMH group. At present, the group has more than 70 brands, such as Dior and Givenchy. Its business projects also extend from the original bags to hotels, cosmetics, watches, jewelry and so on. By the end of 2018, LVHM had more than 70 brands and 4950 stores all over the world. According to the annual report of LVHM group in 2018, the sales volume of the group last year was 46 billion 800 million euros, or about 350 billion yuan, an increase of 10% over the same period last year, creating another historical high.