Luxury Industry Is Unable To Escape Hidden Price Cuts?

Since the beginning of this year, the traditional retail industry has been in a state of sadness, and the luxury industry has not been spared.

Chanel, the French luxury giant, is the first to launch a price adjustment strategy in the world.

In April 8th, Chanel formally coordinated the price gap in different markets around the world. The first price adjustment was classic 11.12 and 2.55 and Le Boy Chanel handbag series.

The head of Chanel China said that the price of Chanel in Europe was raised by 20%, and that in the mainland of China was reduced by 20%, so that the price difference in the global market would be narrowed. The adjusted price difference would not exceed 5%.

Many analysts believe that as a big brother in the luxury industry, Chanel's price cuts in Asian markets have triggered a chain reaction. Major luxury brands will follow suit to adjust the global price system.

In the first half of the LVMH group's earnings report, the performance of the Chinese market and overseas markets showed a trend of ice and fire.

European market growth in the first quarter was 10%, two in the 14% quarter, 9% in the first quarter, 12% in the two quarter, 10% in the first quarter, and 34% in the two quarter.

In the first half of the Greater China region, sales fell by 10%.

The LVMH Group believes that the decline in sales in the Chinese market has been mainly attributed to China's economic downturn, stock market turbulence and mainland tourists' luxury consumption resorts, Hong Kong and Macao.

Adverse effects brought about by sharp reduction.

although

Previously, LVMH group had no plans to adjust its price structure. In fact, in order to balance the price difference, LV raised its average price by 5% in the two quarter after raising the price of European handbags by about 3% in the first quarter.

Former L'OREAL China and MontBlanc China executive Lu Xiaoming has publicly stated that for all luxury brands, narrowing the price gap between home and abroad must be the general trend.

But the price gap should not be narrowed by raising the price of the European market, because the original price difference is unreasonable, and the price of luxury goods in the mainland market is overestimated.

An insider told the Beijing Commercial Daily reporter that the narrowing of the price gap has been completed.

The development of the market is inevitable, but price cuts have always been seen as a "down payment" behavior of luxury brands, so some luxury goods have been recessive.

Luxury goods usually have a fixed price increase of one or two times a year. At present, Chanel is the only one with a high price. Other brands adopt a strategy of secretly adjusting prices.

"For example, the annual price rise from abroad is the two price increase, and the Chinese market does not rise in price, which gradually leads to a low price.

That's what Dior did.

According to the industry, LVMH group is likely to adopt a similar implicit price adjustment method with Dior in the future to achieve price reduction in mainland China.