High End Market Counterfeit Goods Overflow Luxury Giant China Cake

The core business performance has slipped again, and Louis Vuitton [micro-blog] (LV) brand spirit is leaving. The LVMH group (MOET & CHANDON Hennessy LV group), which is entering the transition period, is experiencing unprecedented challenges.

　　 LVMH The group's LV announced on its Twitter official account that Nicola Gesch El, the designer of the former Paris family, has been appointed as creative director to replace Mark, who is leaving. The sudden change of personnel makes the outside world more worried about the trend of LV brand.

At the beginning of this year, it announced that the LV, which had restrained its expansion in China, once again showed its "wolves" side and accelerated the layout of the first tier cities. However, with the rapid opening of LV and excessive pursuit of current profit maximization, the brand overdraft is serious, and the strange circle of business development is becoming increasingly prominent.

　　 Take off the aura.

The departure of the soul mate "little horse" left the industry's eyes focused on LV again. Mark Jakob, who has been the creative director of LV for 16 years, has won numerous awards. In the industry's view, he has made a lot of contributions in the road of LV's rebirth.

Public information shows that the LVMH group was merged by Bernard Arnaud, the world-famous leather goods company Louis Weedon and the liquor family Mohan A Hennessy in 1987. It owns more than 50 brands including LV, Dior and Loewe, and is one of the largest boutique groups in the world. Main businesses include wine and spirits, fashion and leather products, perfume and cosmetics, watches and jewellery, boutique retail and so on.

In November 6th, LVMH group stakeholders in China confirmed to reporters that Nicola, the new creative director, had already taken office. Mark did not leave the LVMH group. Instead, he made great efforts to build another brand Marc Jacobs International of the group, hoping that the brand could quickly go to the market in the future.

For this personnel adjustment, many people in the industry generally believe that the main reason is the high-level change of LVMH group. The daughter of Delphine, chairman of LVMH group, Arnott, transferred from Dior to LV executive vice president 3 months ago, and Nicola, the creative director of the former successor to LV, is Delphine's friend for many years.

"This time Nicola served as the director of LV brand speculation, but on the contrary, it was a good brand marketing to raise the brand's attention. LV is doing this to revive. Latest fashion And the declining momentum of the cortical sector will restore the rapidly declining brand value and try to change the trend of declining performance. Many industry insiders told reporters.

In October 16th, LVMH group released its three quarter earnings report, in which group's core department fashion and leather products department's performance was not satisfactory. LVMH group reported that its revenue in the three quarter was about $3 billion 300 million, down 3.8% compared with the same period last year. Public figures show that in 2012, the total revenue of the sector was 9 billion 926 million euros, up 14% from 2011. By the end of June 30th this year, the sales volume of the Department increased by 1.2% to 4 billion 710 million euros.

"LVMH's market demand for some brands is weak." For the reasons for the decline in the third quarter, Jean-Jacques Guiony, chief financial officer of LVMH, said in a conference call that he also attributed the main reason for the decline in LV performance to the price raising strategy in Japan and the sale of high-end product lines, which were limited by the shortage of high quality leather products.

However, for the reasons for the decline of the LVMH group's performance, Ding Liguo, a veteran retailer of luxury goods, told reporters that the LVMH group's allegations were totally pretexts.

Ding Liguo told reporters that in terms of share, Japan's global market share in LV is also declining. Its sales share is not enough to affect the global sales performance of LV. From the material quality, the shortage of high quality leather materials is an excuse for the sharp decline of the brand.

According to LVMH group's 2012 earnings report, Japanese sales accounted for only 8% of global sales of LVMH group, while Asia (including Mainland China and Hong Kong, Macao and Taiwan) accounted for 28% of Japan's global sales, becoming the second largest market after Europe. And the price raising strategy is also applied to European and Asian markets, rather than simply raising the price of LV in the Japanese market.

"Now the supply of technology and goods can meet the needs of brand production, but only if they are willing to produce. This is the customary practice of most luxury brands, with the aim of artificially controlling production links and making scarce supply of products to maintain high prices. Ding Liguo explained further to reporters that "hunger marketing", which is similar to "limited edition" in luxury brands, is common.

Zhou Ting, President of the Institute of wealth and quality, told reporters that the weakness of the global market has a certain impact on the luxury group, but the performance of the LVMH group must not be attributed solely to the market environment. For a long time, LV counterfeit goods are flooding in the market, and most of them are leather goods. This is one of the reasons why the performance of their leather products department is declining.

　　 Chinese Market Developing strange circles

"Continuous shops, excessive pursuit of current profit maximization, no maintenance of brands, and negative crackdown led to the LV brand falling into a vicious circle of China's development." Ding Liguo told reporters that this is also the biggest problem facing LV in the Chinese market.

{page_break}

From 2007 to now, the composite growth rate of China's luxury goods market has reached two digits in the past 5 years. However, in 2012, the annual growth rate of China's luxury goods market was only 7%. The slowdown in the Asian luxury market has already hit the global luxury brand performance, and many top luxury goods companies have indicated that the pace of expansion is slowing down.

At the beginning of this year, the chairman of LVMH group said that LV will completely inhibit expansion and will not continue to open stores in China's two or three tier cities. Kering group chief executive also announced that it will no longer shop in new cities this year. The group also said it would slow its expansion in China.

But in fact, the pace of expansion of LV in China's first tier cities has not ceased. In November 7th, LV stakeholders told reporters that the company has not stopped the pace of opening stores in the first tier cities. Several shops in Beijing, Shanghai and Shenyang are newly opened stores this year. The strategy of continuing shop is to consider the long-term planning of the company's future development.

At the same time, the person also revealed to reporters that in October 28th, The Peninsula Hotel boutique concept store will be upgraded and reopened. The storefront will expand to the three level on the previous level, of which 122 is boutique boutique, and the first floor is the male area.

According to relevant statistics, since Louis Weedon opened the first store in The Peninsula Beijing Hotel in 1992, Louis Weedon now has 47 stores. In this regard, Ding Liguo told reporters that the expansion of LV shop has begun to speed up the development of mass, this practice has deviated from the positioning of high-end luxury goods, direct overdraft is the brand value, resulting in a serious decline in brand value.

Zhou Ting also told reporters that LV supports the LVMH group's half sky, and LVMH group seems to rely too much on LV's growth to maintain its brilliant performance. In the promotion, overrun with LV as the main hit, resulting in the popularity of LV with the popularity of the whole brand value.

The reporter saw in the 2012 China luxury report that the report carried out a survey of 3754 high assets (10 million or more) people in the Chinese market. The survey shows that the luxury brands with high repeat buying rate are Chanel, Herm s, Cartier, BV and Dior. In the ten luxury brands that best reflect consumer tastes, there is no LV. Only in the "luxury brand fake visibility list", LV topped the list.

According to the report, LV's fake products have been fully covered in China, including purchasing agents, electricity suppliers, distribution agents, etc. The spread of counterfeit goods has led high-end consumers to abandon it quickly. Research shows that 94% of the rich say they will not consume the most counterfeit brand, LV is among them.

　　 Giant cake

Although the growth rate of luxury goods in China has slowed down in recent two years, the competition among the world's leading luxury goods giants has not stopped. In fact, it is not just the LVMH group that is rapidly distributing the Chinese market. The major luxury giants in the world are using different ways to accelerate the layout of the mainland market.

The group chose to increase investment and cooperation in famous brands. Relevant information shows that since 2011, the group has begun to increase its support and input to its brand name celebrities, and it has also been included in the category of key cultivation.

In September 2012, in order to show the importance of the layout of the Greater China region, Mingshi table also selected the core series of Chris's global starting sites in Shanghai. At the beginning of this year, celebrities also signed an agreement with Zhou Dafu, a subsidiary of Zhou Dafu [micro-blog] Jewellery Group Co., Ltd., to set up an independent joint venture in China.

Although Kering and Ferragamo and other luxury luxury goods groups are slowing down the expansion of Chinese stores, the giants have agreed that they will focus on upgrading the supply of existing stores and upgrading their stores and services.

Jean-Francois Palus, director of operations of Kering group, has said that next we will basically be fixed in the same city to change the lot of shops. Reporters in Beijing, Shanghai and other places visited the survey found that Hermes, Bvlgari, D&G and other luxury flagship store after the renovation, the facade curtain wall is quite bright.