Affected By The Epidemic, Luxury Goods Will Inevitably Be Hit.

Affected by the epidemic and the global economic downturn, luxury goods will inevitably be affected.

Bain consulting expects that the size of the luxury market will shrink by 15% to 35% in 2020, and the annual loss is estimated to be between 60 billion euros and 70 billion euros.

In March 19th, the British brand Burberry issued an early warning. Sales in late March may fall by 70-80% compared with the same period last year. In March 20th, the Gucci parent company opened the revenue warning of the cloud group, and the consolidated revenue in the first quarter of 2020 dropped by 13%-14% compared with the same period last year. In March 31st, the LVMH group gave the latest forecast. Sales in the first quarter fell by 10%-20% compared with the same period last year.

Niemann Marcus group, a luxury retailer, has applied for bankruptcy, or will become the first US Department store operator to fall victim to the epidemic. The company was forced to temporarily close more than 60 stores and leave about 14 thousand employees on leave.

The luxury goods which have always attached importance to offline have begun to focus on business and live broadcasting. However, in the face of bad economy, consumers basically choose the former in the face of demand and luxuries.

Some consumers say that they usually buy 1-2 packages a year to reward themselves. But the recent salary is also affected by the epidemic. Taking cash as the king, it is still a wait-and-see look. When buying bags, they will see the luxury live broadcast and share the fun with the little red book.

Accelerate the pace of digital marketing, luxury live broadcast is expected.

According to the first quarter performance report released by LVMH group and Kai Yun group in 2020, the first quarter revenue of the two largest luxury goods giants in the world dropped by 15% and 15.4% respectively.

When the industry faced enormous difficulties, many luxury groups began to save themselves and save themselves.

Bernard Arnaud, chairman of LVMH group and all members of the board of directors, also decided to abandon the salary in April and May and reduce the attendance cost of board members by 30% in 2020. In addition, the group has decided to reduce its dividend in 2019 by 30% and reduce its capital expenditure by 40% this year.

Francois Henlipinot, chairman of Kai Yun group, said that from April 1st to the end of the year, it will cut its fixed wage by 25%. The group also said it had implemented a preliminary action plan to adjust the cost structure and reduce the demand for working capital.

In addition to frugal food, luxury companies are turning their attention to digitalization and live broadcast of e-commerce. In fact, luxury has been accelerating the pace of digital marketing, and gradually electronic commerce, which is not a helpless action under the epidemic.

In March 20th, Armani group's luxury brand Giorgio Armani Tmall official flagship store opened. In addition, many luxury brands such as Cartire and Prada have landed on Tmall since 2020.

At the beginning of the year, Andrew Wu, President of LVMH group Greater China, once said that the brand and the electricity supplier were working together to make innovations. As a fast and progressive market, Tmall reflects China's ability to make progress. What Tmall has inspired international colleagues is "continuous progress". In the long change from planned economy to export economy, the concept of economy is improving, and the electricity supplier has played an important role in promoting it. "

Since the start of 2020, the luxury industry has placed great hopes on the recovering Chinese market, thanks to the new global crown epidemic. The digitalization process of luxury brands represented by LV has accelerated significantly in China.

The key to international competition for the Chinese market lies in finding a better matching channel to grasp online incremental and transform young consumer groups. In addition to Tmall, Xiaohong book became another option for luxury goods abroad. LV, Lanvin and Givenchy have been broadcast live to the world.

More than 70% of the users are 90, and have strong purchasing power and high consumption intention. Search for LV in the community, the number of related notes exceeds 370 thousand, and "LV wear" has more than 30 thousand related notes. The first selection of luxury goods in Xiaohong book is based on the latter's combination with the brand in terms of customer orientation, brand positioning and traffic transformation performance.

Jess, director of Xiaohong book creation number, said that the lifestyle community is always the same platform location. "Because users need to live in this form of content interaction, there is a demand for this way of influencing cash realisation, so we do it. In essence, it is a community product of service creators."

It is understood that the cooperation between Xiaohong book and luxury goods is done by interactive live broadcast, and no product links are linked up. Users can know the design of luxury new season through live broadcast, and then produce subsequent consumption online.

Jess said that interactive live broadcast is an effective means for enterprises to convey brand ideas and display brand tonality. The live broadcast of Xiao Hong's book is the result of a live broadcast rooted in the shared property community, not the end. From the content form, live broadcast is the extension of graphic and video notes. The dynamic sense and instant interaction efficiency of these three forms of content are increasing gradually. At present, the live broadcast of Xiao Hong book 90% is interactive live broadcast.

According to statistics, the popularity of Xiao Hong LV is almost 6 million 300 thousand, and the live interactive rate of LANVIN is more than 36%. More than thirty luxury / fashion brands have an account in Xiao Hong book.

At present, live broadcast can not directly sell luxury goods out of the woods. Consumers are also mixed about the "down to the ordinary" live broadcast of luxury goods, and even feel that the brand tonality is reduced. A "OMG, buy it!" and how many consumers can be prized? How many thousands of wallets are there? What's worth noting is that although the distance between consumers and luxury goods has been narrowed by electricity providers and live broadcasts, the VIP service and psychological satisfaction of store consumption is a problem that can not be solved online.

Live broadcast may not bring luxury goods, but it may become a standard for luxury brands and user conversations.

Take Xiao Hong book as an example. When users grow grass online, whether they are in the official mall or offline, they will go back to the community to share online, and finally form a positive cycle.

It is reported that in the second half of 3 months, the LVMH group's China market has seen signs of recovery. LVMH sales in some parts of mainland China increased by 50% in the early April.

Live goods, luxury needs adaptive process.

In the past 10 years, China is the top consumer of luxury goods, but in 2020, Chinese buyers seemed to have cooled down a lot in buying luxury goods.

According to the 2020 China luxury goods report jointly released by Rhodes Communications Group and precision Market Research Center in February 25th, 10% of mainland Chinese consumers and 20% of Hongkong consumers plan to reduce luxury spending in the next 12 months. Simon Tye, executive director of the center for precision marketing, said at the time that he saw for the first time in nearly ten years that the proportion of luxury goods spent was 10%.

"Although the industry will be partly impacted, it is only phased, and it will revive after that. Now this stage is a relatively special state." Yang Ge, founder of star capital, said to hunter cloud network.

In his view, since 2020, in addition to the enormous changes in the production chain of many industries, the demand side has also changed, including demand, consumption, purchasing power and scenes. Especially when many people are working online after the isolation of the pandemic, there may be a marked downward trend in semi rigid consumer goods, such as luxury goods.

When finance is growing up, the demand for luxury goods will continue to rise, and finally enter the advanced state of finance. But luxury itself is a 1.5 demand commodity. When finance enters a bottleneck or obstacle, consumers' demand for price performance will increase. This time, it will break out from luxury goods to the outbreak of second-hand luxury goods.

Dong Bowen, the founder of the second-hand (luxury) luxury goods trading website, said to hunter network that every secondhand commodity is different from each other, so every middle bag is a live content with natural attributes. Live broadcasting is better for second-hand goods than for new products.

Direct seeding may not bring expensive new luxury products, but it is an opportunity for the relatively cheap and storytelling secondhand middle ages.

"Our industry is related to economic factors, and the economic downturn is helpful to leveraging the supply chain of second hand luxury goods, so although the whole industry is limited by the influence of express and so on at the beginning of the epidemic, the recovery is relatively fast. Compared with the development rule of the Japanese luxury goods industry, we think the economic downturn will be good for the industry." Dong Bowen said that the heart has been broadcasting live on all platforms.

Chinese consumers' demand for luxury goods has led to the sharing of luxury goods, second-hand luxury goods and special sale of electricity providers. According to Qi Xinbao data, there are 216 Chinese enterprises related to luxury goods, of which 110 enterprises are in the stage of financing between angels and E wheels, and most of them are in the early stage of entrepreneurship. In recent years, apart from secondhand middle ages, discount sale has also become the key word of luxury goods.

April 20th, Tmall luxury discount channel Luxury Soho low-key on-line. Tmall luxury officials also continued to broadcast live on the theme of "super black five days" for several days in a row, and drained Luxury Soho channel between live rooms. In addition, there are many luxury sale platforms on the line, including Xiaomi's e-commerce platform, Xiaomi's "name discount" channel, and the interesting shop group's cross-border e-commerce, which are all sold as discount luxury goods.

Yang Ge said that for the enterprises entering the luxury industry, the reorganization of supply chain and the reorganization of supply channels are an important opportunity. In the luxury industry, huge changes in the consumer market and sales patterns are relatively difficult, and there are still many opportunities for further standardization of the upstream supply chain and circulation process, efficiency and cost reduction.

Under the epidemic situation, all trades and professions are shuffling, and the luxury industry is no exception. Those enterprises that can quickly establish new channels and adapt to new channels and display methods will give priority to some opportunities and integration capabilities.

In Yang Ge's view, online live broadcasting may not be a long term format, it will gradually evolve into online MCN, allowing some MCN brokerage firms to manage and form a new sales channel. At this stage, the sales channel of luxury goods under the influence line and the sales channel of part of the electricity supplier will be slowly revival in the future period, and eventually the goods will be balanced with the video live broadcast.

"The cooperation between luxury goods and platform live broadcasting is normal, because brands have seen the transformation of traffic. Traffic flows from traditional electricity providers to the traditional Internet platforms, so it is actually a process of expanding MCN channels for brands. The rapid change and expansion of new business is not so much a self rescue, but rather an adaptive process of luxury at the present stage.