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China And Europe Luxury Price Difference Disrupts Global Pricing Strategy

2015/6/1 22:58:00 31

Recent exchange rate fluctuations exacerbated the spread. Bernstein's data show that the price of "Speedy 30" handbags in Louis Weedon (Louis Vuitton) is 61% higher than that in Western Europe. The spread of luxury handbags, watches and jewellery in Europe and China is the largest in 3 years, and the euro's weakness has disrupted the global pricing strategy for high-end consumer brands.

　　 Bernstein (Bernstein) analysts said that the fluctuation of exchange rate meant that Chinese consumers would be 39% cheaper to buy luxury goods than Paris, compared with 26% last year.

The widening price gap has made headache makers such as Patek Philippe watches (Patek Philippe) and fashion brand Chanel (Chanel) headache. Luxury goods The brand risks the risk of offending the customer to adjust the price so as to suppress the second-hand (or "gray") luxury market.

Although price cuts will be made in many retail sectors Consumer Benefits, but in the field of luxury goods, they represent the danger of the brand being seen as a devaluation.

Bernstein analyst Mario Orr Talley (Mario Ortelli) said: "if you raise the price (to deal with exchange rate fluctuations), that's not bad. Customers are glad and proud of buying products before they raise their prices, but if you reduce prices, they will feel cheated.

The price of luxury goods in Europe has historically been lower than that in China and other countries. The latter's import tariffs have increased the cost of luxury brands, thereby giving birth to intermediaries engaged in arbitrage between the two places.

However, the recent exchange rate volatility has exacerbated the spread. Bernstein's data show that the price of "Speedy 30" handbags in Louis Weedon's (Louis Vuitton) is 61% higher than that in Western Europe. In March this year, the price of luxury handbags in France was 45% lower than that in China, compared with 32% last year. The difference between luxury watches and watches in the two places is 33%, 21% last year.