Chanel's "Waterloo" In China

20%.

This is the average price reduction announced by CHANEL (Chanel) in the Chinese market.

This means that the price of a classic Chanel 11.12 handbag dropped from 38 thousand and 200 yuan to 30 thousand yuan in the mainland. Compared with the European price, the price difference narrowed from 14 thousand and 700 yuan to 1800 yuan. The price of LeBoy handbags in the mainland of China dropped from 32 thousand and 700 yuan to 26 thousand yuan, and the price difference narrowed from 12 thousand yuan to 1400 yuan after the European price rise.

From Hangzhou Tower to Shanghai golden center, from Chengdu international financial center to Beijing Xinguang world, from Hongkong to Europe...

Where there are Chanel stores, customers are queuing up to rush into stores. Even at 20:30 PM, customers are still numerous.

According to incomplete statistics, the average queuing time takes 1.5-2 hours.

Chanel defines the goal of this action so as to "coordinate the price gap in different markets around the world. The final price difference is controlled at around 5%. Customers can buy Chanel products at similar prices wherever they are.

The first adjustment is classic (11.12 and 2.55) and LeBoy series.

But this "price coordination" will be adjusted in 2015 for all product lines.

In view of Chanel's position in the luxury industry, other luxury brands will undoubtedly follow suit when she starts a comprehensive price reduction model in the Chinese market.

LVMH's high-end watch brand, Yu Bo, Zhen Li Shi, and heuya launched the banner of Hongkong and the mainland in 2014, hoping to activate the mainland market.

Jaeger Le Coulter, the luxury brand of the world's second largest luxury brand, also said price adjustments would be made in different regions, including the Chinese market.

"There was no global uniform price before.

Because the logistics, tax and other standards in different regions are different.

Former Hermes business director of China, and later promoted to the summit of BOTTEGAVENETA China president.

Chanel comes from France, and the price of brand origin should be low, because it saves at least a large range of logistics and pportation costs.

And China's high price is more related to tariffs, excise taxes and value-added taxes.

In 2013, Premier Li Keqiang signed a Sino Swiss FTA agreement with Switzerland during the visit to Europe. Switzerland's tariffs on watches exported to China will be greatly reduced and even zero tariff will be achieved. The price of Swiss watches is not expected to fall. There are many other taxes besides customs duties, especially the consumption tax with a tax rate of up to 20%.

China's commerce minister Gao Hucheng also said during the two sessions this year, "the reasons for the wide spread of the price gap are: first, there is a relatively high tax rate on taxes and fees, especially consumption tax; two, the domestic circulation costs are too high.

High; three, the pricing strategy of foreign brands to China.

"The pricing strategy is based on the price of the brand, such as Europe and neighboring areas, and then the cost of Taxation and logistics. The mainland of China takes Hongkong as a reference."

Gao Feng said.

This is why Chanel announced the global price coordination and queuing up in Hongkong.

There is a price difference between France and Hongkong, the source of the brand, but the tax rate in Hongkong is relatively low, and the price difference is controlled in a relatively small range.

The rush of consumers in Europe is to catch up before prices rise.

"In the past, the brand was happy to see the spread of prices everywhere, which is conducive to balancing the global market.

For example, Europe as a mature market growth is slow, China as an emerging economy, will bring a lot of overseas shopping.

But China's luxury market has reversed in the past two years.

The tide of anti corruption has seriously reduced a large number of customers who are accustomed to buying luxury goods as gifts. Recently, the euro has depreciated by nearly 30%, making the price gap between domestic and international markets bigger and bigger, and the sale of luxury goods in the mainland of China has been sharply skiing.

The latest report released by the Institute of wealth and quality, a luxury Research Institute, said that the consumption of Chinese luxury goods in the mainland in 2014 decreased significantly, to 25 billion US dollars, down 11% from the same period last year. However, the number of Chinese overseas purchases increased by 20% annually, reaching 81 billion US dollars in 2014, that is, about 76% of China's luxury consumption occurred overseas.

A large number of China

Stores are reduced to billboards, display shops and fitting rooms. Most people choose to try size and color in Chinese counters, waiting to buy them in Europe or bring them back to sea.

If these overseas purchases return to China, the Chinese market will become the undisputed largest luxury market in the world, not Hongkong.

Since then, Hongkong has been ranked the world's largest luxury market by virtue of its large consumption from mainland China. Even in the regional division of luxury brands, Hongkong and Japan are independent of the Asia Pacific market.

Because of the sluggish sales in China, the reduction of the Chinese region

Become the consistent choice of many brands.

Chinese managers in various brands are even more complaining, and have repeatedly protested to headquarters about China's pricing strategy.

Liu Wei, a deputy editor in chief of fashion COSMO, said a luxury brand China marketing director was asked to reduce advertising in China by headquarters. He responded: "as long as you don't worry about global sales falling together, finally, the advertising budget is rising."

"The management method of luxury brands is headquarter management. The regional markets can only obey and have no right to speak."

The high level of Chinese brands that can be a foreign brand is rare. It has been the summit of president of BV China, but still chooses to quit and start business. It is precisely because he wants to win the decisive power of the market.

Lu Yi Si, President of Cartire China, also admitted that the market management method of luxury brands is different from that of the auto industry in decentralization to the regional market.

"Over the years, the brand side has opened up stores in China with high operating costs and huge investment, but sales have not risen or fallen, which has seriously dragged down the company's profit and earnings.

Therefore, price adjustment is the last resort.

Taking Chanel as an example, sales revenue in 2013 was 4 billion 980 million euros, or about 6 billion 600 million US dollars, slightly higher than that in 2012, but its net profit dropped sharply from 1 billion 150 million euros in 2012 to 7.26 billion euros.

There are similar situations in the world's three largest luxury goods groups, LVMH, Li Feng and Kai Yun, especially men's wear and watch business, which dropped by 13% and 11% in 2013 and 2014 respectively.

Since the factors that affect prices, such as taxes and logistics, are not controlled by the brands, they can only make changes within the scope of their own pricing.