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Who Is The Most Proud Of "Luxury Price"?

2011/1/6 9:13:00 228

　　 Luxury brand Or 30% of the price increase, the "rising price" theory, once again pushed the recent sensitive prices to the cusp of the storm. It is reported that, influenced by factors such as rising cost of raw materials, exchange rate and policy uncertainty, and at the same time, make up for foreign luxury goods. market As a result of the loss of profits caused by weakness, luxury brands are likely to increase by 30% in the Chinese market.

Event review: Chanel 2.55 leads luxury Price increase Grand Opera

Incident review:

1.Chanel 2.55 leads the price of luxury goods

"The price of a Chanel handbag has increased by nearly 20% compared to three months ago, but even so, the classic Chanel 2.55 is still out of stock." While shopping in the discount season in Singapore from 7 to August, Wen Ren De returned empty handed from the Chanel store on the busy Orchard Road. The business woman in Thailand, who had been in the store for more than 40 minutes outside the store, visited the shop for less than ten minutes and then walked out of the shop with a look of disappointment.

Although last year's (2010) July and August are often the discount season for shopping centers such as Singapore and Hongkong, the summer luxury brands instead replaced past promotional promotions with price increases. Chanel Shanghai office told our correspondent that the number of classic models in the brand handbag is higher than that in July 1, 2009, and the retail price has increased by 7%-20%, while most other packages have not yet fluctuated.

"Many favorite bags not only did not participate in the summer sales promotion, but increased their prices to varying degrees." Nevertheless, Wen Ren De still bought a lot of "spoils" in the "shopping spree". She said: "the price of the first tier brand is increasing. If you don't buy it now, maybe it will be more expensive until the autumn. "

In fact, Chanel is not the only brand to raise prices. According to the overseas edition of the people's website, the prices of some commodities sold by Gucci in Europe increased by about 4% to 5% in June 2010, and the price rise of Hermes will follow closely. There are still many people in the industry who believe that after the price rise of LV in February 2010, some of its products sold in Europe are likely to rise again in summer, though the products sold in China have not yet risen.

But this "shock" price has only hit a small number of Chinese tourists, and then they have reformed their power to invest in the queues. "Anyway, inflation has gone up, but it is hard to achieve. It is not a stock. It is not a stock. We always have to buy it. We should buy it sooner rather than later." Zhou Wei, the second hand luxury luxury shop owner, has just returned from France, which is the original word for him to take the goods.

Asian customers' purchase rises sharply, Louis Weedon shortens Christmas business hours

2. Asian customers are buying up Louis Weedon shortens Christmas hours.

"Next month, I intend to buy LV and Chanel in France, and I will have several people with bags when I hear the news, but there is a little worry that customs will not get through here. What is more worrying is that I heard that Paris is out of stock seriously, and don't know how luck is. " But when she saw recent reports from several French media, he was less optimistic: because of the rapid increase in the number of foreign tourists based on Asian tourists, "Louis Weedon" had to shorten the business hours of many of its stores in Paris, so as to avoid the danger of being out of stock at Christmas.

Watch brand prices start to improve

3. watch brand prices begin to improve

Swatch group watches brand Hamilton3 month price rise, OMEGA also promoted the middle and high price watch rose, up to 13%, in addition, watch group Richemont was also driven by Cartire brand. After the economic crisis, the premium prices of high-end watches resumed, reflecting the exchange gap that they had absorbed over the past year. {page_break}

Luxury prices are rising: scholars and experts are divided.

1. exchange rate is a double-edged sword.

Why do luxury brands choose to increase prices in the discount season? The main reason is the exchange rate.

In June 5, 2010, the euro fell against the US dollar to its lowest level in more than 4 years. Since the beginning of the year, the euro has fallen by more than 15% against the US dollar. Although the sales volume of many luxury brands in the first half of 2010 has increased significantly under the influence of the global economic recovery, they still choose to raise the price to compensate for the losses caused by the exchange rate.

For the luxury brands produced in the euro area, the increasingly serious exchange rate issue is a double-edged sword. "For those American consumers who will go to Europe to participate in the fashion week of Milan and Paris, the price of the euro after the rise of all kinds of fashionable clothing is almost the same as that of the first half of the year. For them, the actual dollar price of these items has not changed much. " Gucci's CEO Patrizio di Marco was not long ago.

In particular, for the luxury brands that buy parts and raw materials from the dollar zone countries, the depreciation of the euro means that the interests will shrink and the cost will increase. "The raw materials of many fashionable brand products are settled in US dollars, and the depreciation of the euro eventually increases the cost of products virtually." "In this case, only by raising the price of the product can we make up for the long-term adverse effects of the exchange rate," Mr. Dumac, chairman of Rhodes Public Relations Asia, which serves many luxury brands, said in an interview with reporters, Jean-Michel Dumont.

However, exchange rate is not the only reason for the recent fluctuations in luxury prices. "Although sales of luxury goods have rebounded significantly in the first half of 2010, the debt crisis in Europe and the budgetary gap in western countries may lead to tax increases, which will have an impact on the price of luxury goods." CEO Milton Pedraza, Luxury Institute Research Institute in the US said.

"Luxury brands, of course, want to maintain their" unattainable "attitude in the minds of consumers by raising prices, and then promote their desire to buy, which is also one of the reasons for this price surge. Mr Dumac believes that "this price increase will be repeated in the future."

Chanel shop front

2. levy luxury tax. Chinese consumers are willing to pay for the price increase.

The expectation of levying luxury tax in China has given rise to a direct reason for price rise.

Common sense tells us that the consumption elasticity of luxury goods is very high, and the price increases often lose a large number of consumers. However, this rule seems to be unable to be verified in China. It seems that the new rich people in China do not take the price increase of a luxury item less than hundreds or tens of thousands of dollars seriously.

"It is because of the recession in Europe that we need to make more money in China." A luxury agent said so. Consumers who spend money in China often do not understand the cultural and artistic connotation behind the brand, but are in an irrational consumption state.

Another interesting statistic is that in China, up to half of the luxuries are consumed as gifts. In the face of such a strong market, luxury brands are holding on to the "Eastward March". Price increases are no longer a risky decision. In the face of the economic downturn and the depressed market in Europe and America, Chinese people are too "force"!

Chinese consumers are willing to pay for rising prices.

Some fashion industry veterans predict that there will still be a trend for luxury goods to rise in the future. Ronnie Armist, executive director of British investment company's Stonehage Investment Partners, is one of them: "luxury products and services are gradually stabilized after several years of turbulence, and people will be more careful to spend. But we can expect that the price of luxury goods will grow slowly and steadily in the future."

But will consumers pay for this part of the price increase caused by exchange rate problems?

"In France, the second largest euro area countries, the cost of clothing has dropped by 4 percentage points in 2009, and this year it will not be any good." "Consumers are always being plagued by commodity prices," said Francois Marie Grau, Secretary General of the French women's clothing Federation. If prices continue to rise, perhaps the fashionable French spend less money on luxuries this year.

LV stores crowded in front of the store.

While the other part of the luxury consumer price rises, the high-end shoppers who still dare to shop think that "no one knows when the next wave of price rises will come." Wen Ren - De is one of them. "From another point of view, whether Chanel or Cartire, the price increase means that these items will be more secure in the future," she said.

In July 20th, Rhodes public relations and one of the leading companies in Asia luxury market research industry, albatross Joint Business Consulting Co., Ltd. released the "2010 China luxury goods report". "This survey shows that in 2010, the top fashion apparel products occupied the absolute advantage in the luxury brand ranking of consumers, and Louis Vuitton, Chanel and Gucci ranked the top three brands. These brands have been rising after the outbreak of the financial crisis. This shows that the price increase has not affected the enthusiasm of Chinese consumers. Mr. Dumac said.

Like Du Mike, Simon, Asia Pacific Research Director of Ipsos, also believes that even if there are collective price increases of several luxury brands, Chinese consumers will not suppress the enthusiasm of buying luxury goods for such reasons. Simon said, "people are keen on brands, whether they are handbags, clothes or cars, and consumers have a strong desire to buy. This also directly promotes the sale of luxury goods in China.

However, many brands still choose to cut costs and sell their products at relatively low prices. "We will reduce the cost by about 15%." Coach CEO Lew Frankfort said, "we believe that consumers will not be able to give in easily. They haven't bought brand-name products before 2006 for a long time. After the economic crisis, consumers have a new concept of luxury goods. They are looking for cheaper prices and higher quality products. This is a long-term trend. "But the top executives of many companies are obviously different from mine." Frankfort added at the same time. {page_break}

3. luxury prices rise from international operations.

At present, the price rise of luxury goods is largely due to its international operation.

Data from the World Luxury Association show that luxury brands earn 30% of their profits every year from Chinese consumption, while 60% to 70% consumption is generated by China's luxury purchases abroad.

The first important thing for LV and other brands to operate internationally is to establish a sales system in China's strong consumption areas. Rising prices have left enough profit margins for emerging markets. It also made up for the global failure of luxury goods due to the economic crisis.

In particular, LV controls all aspects of the value chain, both brand owners, producers, wholesalers, agents and retailers. The rise in price has earned rich multilayered profits.

4. the cost of raw materials has risen. Some brands have increased their prices two times.

Data show that leather prices rose by 5% - 10% this year, mainly due to the shortage of sheepskin supplies. Insiders have analyzed that the rise in crude oil prices will drive all sectors to price increases, of which leather industry is rising faster than other industries.

"Now many tanning enterprises are in a state of small profits or zero profits. On the surface, orders are good, and they are doing very well, but in fact profits have been reduced to a very low level." Chen Zhanguang, Deputy Secretary General of China Leather Association and director of leather Specialized Committee, said.

The "raw material price increase effect" has spread to the market as early as July 2010. Following the regular price adjustment at the beginning of the year, the international luxury brands headed by Chanel carried out the second price adjustment this year in early July.

According to an insider of Chanel, the price hike took account of the changes in raw materials and exchange rates, and raised the price globally. France raised 40% and Mainland China increased by 10%. The average price of a bullock bag was 3000-5000 yuan in the mainland stores.

However, there are opposite points of view: cost is just "floating clouds".

The official's statement is that considering the changes in raw materials and exchange rates, it is necessary to raise prices globally. When a luxury bag price rises by 10% to 30%, it means that consumers will have to pay tens of thousands of yuan money.

Is cost the real reason for the rise in luxury goods?

The pricing principle of luxury goods has never been identical with the pricing of ordinary consumer goods. Luxury goes beyond traditional pricing thinking. His first task is to maintain the fundamental character of high price. This is the spiritual value of luxury goods.

At the height of the economic crisis, reports of the failure of the luxury goods group were everywhere. I saw this scene at the Hermes store in Hongkong: a decent girl saw a bag that was out of stock, and used a pleading tone to say to the clerk, "please understand my feelings. My cousin is going to have a birthday soon, and I want to give her an unforgettable gift." The clerk almost replied to customers in diplomatic terms. "I understand your feelings. But I'm sorry, please wait. "

Here, the role of consumers is not God, but is like asking for alms. Less expensive supply is the profit principle of luxury goods. The economic crisis will curb consumer spending, but will not eliminate the desire for luxury goods.

Although luxury goods are regularly discounted, it is not a low price strategy, but a clean up of inventory.

5. customs policy against purchasing

Ouyang Kun, China's chief representative of the World Luxury Association, analyzed that the 54 order of the customs no doubt severely dealt with overseas purchases of luxury goods. 30% of the profits of luxury brands come from Chinese consumption every year, while the consumption of 60% to 70% is generated by China's extravagance of luxury goods abroad. Such a huge amount of funds can only be regulated from policy.

Now, casually open an overseas purchasing Taobao store, "no bargaining, no postal mail" and "delayed delivery period" and so on, because of the influence of Customs Order No. 54, overseas purchasing is placed in the most prominent position in the shop. This policy is forcing consumers to return to the country to buy luxury goods.

It is understood that this is just the overture of China's policy of adjusting luxury products. Next, the government will formulate a new luxury tax policy based on market feedback and consumer response.

Louis Vuitton store on Champs Elysees in Paris

Price forecast: prices are expected to rise at least 30% at the beginning of the year.

According to Ouyang Kun analysis, combined with the cost of raw materials and tariff and exchange rate policies, luxury goods prices are expected to be adjusted in early 2011.

With regard to the price adjustment, he believes that with the adjustment of various tariff policies and the decline in overseas purchases, domestic purchases will not necessarily increase immediately due to price and other factors, which will affect the global profits of luxury brands, and they may pass the loss onto consumers.

Once the price of luxury goods rises at least 30%, it will be nearly 15% times the annual regular price adjustment. However, as China's luxury market is still rising, he predicts that even if the price is adjusted by 30%, the annual consumption of the Chinese market in 2011 is expected to exceed 10 billion.