The "Doorway" Interpretation Of Big Global Price Adjustment

"It's very interesting. So far, the first question everyone talks to me is always about the discount and discount of luxury goods in China."

Clemens Pflanz, founder and chief executive of the Meisterkreis Luxury Association in Germany, is a little bit tired of asking the same question too much for Clemens.

This happened at the seventh Summit Forum of top brands sponsored by CEIBS last weekend.

In the friendship Hall of the Shanghai Exhibition Center, luxury brand executives and industry experts on stage are unable to avoid the most popular keywords in the "turbulent" Chinese market, such as price cuts, discounts and the Internet.

Hundreds of meters away, at the gate of GUCCI store, Rui o department store is queuing up for a long summer queue.

Not long ago, a similar scene took place in Chanel.

The industry leader has made bold decisions to reduce China's product price by 20% as part of global price coordination.

They are busy following up, watching or sneak out.

"In the next two to three years,

Basically, the balance between China and abroad will be realized. "

A luxury brand China head Aaron (alias) told me.

Apart from the obvious and open follow-up of Chanel in China

The brand, the insider told me, for example, Yves Saint Laurent although not publicly claimed, but some of the bags have been cut by 20%, and Bottega Veneta will soon follow up the price reduction.

From the present point of view, the effect of the "fierce" way of reducing prices is also obvious.

"Do you know? Yves Saint Laurent those bags that have been cut down have been sold short.

Chanel, too, has helped boost sales of other product lines. "

The person familiar with the matter said.

But Bernard, Arnott, the head of the LVMH group of the industry, seems to be "sniffing at this kind of behavior". His flagship brand Louis Vuitton still appears to be unmoving until now. In Arnott's view, luxury goods can only rise in price. Even if other brands have already been popular for sale or discount season, they will require strict control.

Aaron also has his concerns. The price difference between China and Europe is not small, but the price difference is mostly caused by taxes, excise duties and value added tax.

Sharp sharp price cuts in China are bound to sacrifice the profit margin of the brand in China. Of course, the promotion of sales volume and the promotion of inventory digestion by some brands will also result in an increase in profits. Finally, the business may be better.

But the brand that Aaron is responsible for is never even discounted in China, and is very sensitive to price. They can not carry out "fierce" price adjustment.