According to a report from the "The Wall Street Journal" website, over the years, the world's largest luxury goods companies typically make the price of luxuries sold in mainland China and Hong Kong 25-40% higher than the price in the European countries.
The US company Bain said, luxury goods sales growth in China was under pressure, the Chinese luxury goods market size accounted for about 1/3 of the total global market size. Take the world's largest luxury goods company LVMH Group for example, in the first quarter of this year its sales in Asia decreased by 6%.
However, Chinese consumers are still buying luxury goods. They just are buying luxury goods in China. In 2014, China's domestic luxury goods sales dropped to about $ 25 billion, a dro of 11%. However, the Shanghai wealth quality research institute said that at the same time the expenditure that Chinese consumers spend on luxury goods abroad rose 9% to $ 81 billion.
Morgan Stanley estimated that in the luxury goods sales Chinese consumers created, more than half of them were achieved in the overseas market: some buy luxury goods during travel abroad, others buy luxury goods by the gray market.
This practice not only affects the luxury goods companies’ control on goods, but also hurts their business strategies in Asia.
In the earlier this year Chanel took measures to cut price in China, while increasing the price of some of Europe's flagship products, in order to reduce the price difference between the two areas. Luxury goods companies need to address the fundamental problem of pricing. Some companies are introducing luxury goods with lower prices in the Chinese market, which narrows the price difference, but does not affect existing merchandise sales.
For the luxury goods industry, the uniform price may in fact be the trend in the future. (www.chinainout.com)
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