Why Is There So Much Difference Between China And Europe And America?

Why are there so many differences between luxury goods in China and those in Europe and America? What are the reasons behind many Chinese consumers?

But people in the industry said: "in the Chinese market, tariffs account for up to 5% of the final retail price of luxury goods."

A survey by the luxury research center of the University of foreign trade and economics found that the price difference between the domestic and foreign watches in the Chinese market was 100%-350%, the price difference of jewelry products was 20%-80%, the price difference of luggage and leather goods was about 30%, while the price difference of cosmetics was 40%-120%, the highest even reached 188.5%.

What is the main reason for the high price of domestic luxury goods? The director of the luxury research center of the University of foreign trade and economics explains that in these different regions, the price base specified by the brand is quite different.

In Europe, where luxury brands are mostly of origin, the base price of luxury goods is 100. For New York, brands usually set a base that is slightly higher than their origin, such as 105 or 110, while countries in other parts of the Americas make the final price index based on the reference price of New York based on different tax rates and operating costs of different countries.

At home and abroad, behind the formation of price differences, China

The relatively high price is a reason, but not the most important reason.

Many agents believe that after the first tier brand is directly operated, the biggest two part of the price dismantling is tariff and department store royalty.

The tariff on quartz watches is 23%, consumption tax is 20%, and import value added tax is 17%.

(price is more than 10 thousand yuan, three tax collection, exemption from 10 thousand yuan), the tax rate of only 10000 yuan or more quartz watch is only 60%, such as perfume, tariff 10%, consumption tax 30%, import value-added tax 17%, also higher; besides, mosaic jewelry, customs duty 35%, consumption tax 10%, VAT 17%.

We need to increase the price by 62%.

This is also an important reason why many foreign brand jewellery abandoned China.

At a price of $1000, the tariff is between 20% and 17% of the import link. In addition, according to the mode of logistics, the freight cost is about 1% to 2%.

If the FOB price of a package is US $1000, the cost of the package to China will be between us $1360 and US $1370.

If so

According to the pricing law, the price of the bag is around 4200 dollars.

Tariffs account for about 9% of the final price.

This package is sold in the domestic market, and the portion of the US $4200 minus the US $1370 cost price, that is, US $2830, also needs to pay 17% of the domestic sales link, that is, 481 US dollars.

In this way, a $1000 package of government revenue is $851, equivalent to 20.3% of the final selling price to the government.

Judging from the current general mode of cooperation, luxury flagship stores and shopping malls generally cooperate through "raising points".

"At present, the decoration of luxury flagship stores is generally carried out in accordance with the specifications of 20 thousand yuan per square meter, but the money is usually borne by shopping malls.

But shopping malls should be deduct from luxury sales. "

The agency disclosed that with the brand bargaining power different, this part of the increase from 20% to 30%, "some must be as high as 30%."

"If it's done well.

The cost of brand promotion can be controlled at 5%. Generally speaking, most of the luxury brands in China need to spend about 15% of their sales to cultivate the market, and human resources cost also accounts for about 5%.

In addition to the above costs, in the current business environment, the promotion of luxury goods still needs a lot of public relations costs.

The price difference between domestic and abroad has made the luxury enterprises taste some sweetness at the beginning, but with the increasing number of luxury stores entering the two or three tier cities and ushered in its growth rate of more than 100%, not only for the government, especially for many enterprises, the huge difference between domestic and foreign prices has finally evolved into a thorny problem.