Luxury Brands Finally Cut Prices.

Luxury brands, which frequently increase their prices every year, are at a price lower than P.

The French luxury group MOET & CHANDON Hennessy Louis Weedon group (LVMH) watches the brand name Yu ships starts to implement the Hongkong and the inland price.

According to the price gap between the two places, this adjustment means that the price of all products in the domestic market will be reduced by 10% to 20%.

< /p >

< p > as we all know, in the past, because of various tax and other factors, the price of "a href=" //www.sjfzxm.com/news/index_c.asp "luxury brand" /a "in mainland China is much higher than that in China, Hongkong, Europe and the United States.

Taking the wrist watch as an example, considering the factors such as tax rate, exchange rate and other factors, the price of mainland products is higher than 20%~30% in Hongkong area. Compared with some European countries, this price difference is even more than 40%.

< /p >

P, plus exchange rate changes, raw material costs and other reasons, luxury brands will continue to raise their prices every year.

But the price adjustment of Yu Bao table may impact the luxury brand's "biased" pricing strategy in the past.

< /p >

< p > for the "parity" action, Yu explains that "first, because of the establishment of a free trade agreement between China and Switzerland, there will be further adjustment of the luxury tariff, and secondly, to strengthen the relationship between the brand and the mainland consumers."

< /p >

< p > however, insiders believe that the signing of the Sino Swiss FTA is actually more symbolic than the actual agenda. The Sino Swiss FTA has limited influence on the mainland watch pricing in the short term, and the sale of high-end watches in the mainland of China is the real driving force of the same price.

< /p >

< p > data show that from the second half of 2012, Swiss watch exports to China began to decline sharply.

In the first 11 months of 2013, Swiss watches exported 1 billion 302 million Swiss francs to the mainland market, down 15% from the same period last year.

The mainland has also been relegated to the fifth largest market by the third largest export markets in the past.

Many luxury brand watch department performance has negative growth.

< /p >

< p > the research on China luxury market in 2013 released by Bain consulting company, a research institute, pointed out that the growth of China's luxury market in 2013 was further slowed down. Among the two categories of men's clothing and watches, the impact of the trend was the most serious: watch sales fell from 5% in 2012 to 11% year-on-year, the higher the price of watches, the greater the decline.

< /p >

< p > the wealth Quality Research Institute shows that China's luxury goods market is divided into two parts: local consumption and overseas consumption. In 2013, local consumption will reach 28 billion US dollars, with an expected increase of 3%. Overseas consumption will further increase to 74 billion US dollars, and the sum of two people will add up, and the total consumption of luxury goods in 2013 will reach 102 billion US dollars.

< /p >

< p > although the global luxury market is facing many pressures in 2013, the annual growth rate is expected to reach 11%. Among them, the Chinese will buy 47% of the world's luxury goods.

In 2012, Chinese luxury goods accounted for 40% of the total consumption in Europe and the United States, and by 2013, luxury goods in the mainland had been as high as 80%.

< /p >

< p > the pressure of luxury brands in the Chinese market can also be seen from their earnings reports.

The Asia Pacific region, led by China, is the largest market in Switzerland, Richemont, which accounts for about 40% of its global sales. However, after the worst performance of the Asia Pacific region in the first half of 2013, the Asia Pacific performance in 2013 continued to be under pressure. In particular, the 10~12 Market in the past has driven the growth of the world in the past, and is the only major selling market in the region.

< /p >

< p > > a href= "//www.sjfzxm.com/news/index_c.asp" > the signing of the Sino Swiss FTA < /a > has given the watch brand the "excuse" for its internal and external parity.

< /p >

< p > "this is the market being forced, and now the luxury customers in the mainland market are losing a lot. I see that many brands of customers are basically going abroad to spend, and the price gap between domestic and overseas is so large that rational consumers will not blindly buy in the mainland unless it is some irrational consumption, such as gift giving, but this piece is now greatly affected by the government's anti-corruption."

He Bin, director of Italy luxury brand Kiton, said in an interview with reporters.

< /p >

"P", "in the mainland and Hongkong, and even Europe's parity strategy, I think it is the inevitable trend of luxury brands," He Bin predicts, "the Chinese luxury market is gradually returning to rationality, so the attitude of luxury brands to this market will be more rational, rather than the mentality of profiteering."

< /p >

< p > > a href= "//www.sjfzxm.com/news/index_c.asp" > Yu Bu < /a > took the lead to flatten the price difference between Hongkong and the mainland, which means that the accumulation of consumption power in mainland China has reached the level of Hongkong, Japan or Germany and Italy in the past, so that a company must make specific strategies for the Chinese market and make a series of adjustments in other related markets.

Although Hongkong has absorbed many luxury goods from the mainland as a shopping paradise, the volume of Hongkong can not support the entire Chinese luxury market. After all, the potential of high-end consumption in China is still very large, with more retail outlets in the mainland and more convenient for consumers to buy.

< /p >

Lu Xiaoming, founder and President of organic P, also believes that the price difference between Mainland China's list and the price difference outside the mainland will be the trend of the times.

"Once the successful Shanghai free trade zone is successful, it will be copied to the whole of China. At that time, the meaning of the existence of such a duty-free port in Hongkong is gone. If the luxury brand does not take this step earlier, it will be very passive in the future."

Lu Xiaoming analyzed in an interview.

< /p >

< p > although only one brand is the same price between Mainland and Hongkong, but when all watches and brands are involved, the real impact will not only be the watch brand and the Hongkong market.

To be sure, there will also be a lot of repatriation of overseas consumption. The change in the flow of such large scale funds (13 years of China's overseas luxury consumption to nearly US $80 billion) is no longer simply a matter of brand behavior and China's watch industry, but will involve the national economic and trade and political level.

< /p >