The Strategy Of Luxury Brands Entering China: Grasping The Consumption Psychology Of "Buying Up But Not Buying"

LV launched a series of controversies in the exhibition of "Guo Bo", but this does not affect its great absorption of gold.

There is a joke: a girl from the mainland is working in a cabaret in a coastal city.

There was no cell phone at that time, and long-distance calls were very expensive.

The little sister in her hometown telegraphed to ask her how she was getting along. The girl answered six words in order to save money.

I don't know if I have heard of the big international card in China. However, their feelings in recent years are almost the same: the difference between showing off their wealth and the gap between the rich and the poor has led to a vicious circle of Chinese consumption and an endless market.

The consumption of luxury goods began in the middle of last century. However, the global financial crisis in 2008 led to a 10% decrease in luxury consumption in Europe and the United States. China, Russia, Brazil and India had risen by more than 10% against the market.

China is the leading role.

Luxury goods in mainland China in 2010

What is the model of Fifth Avenue? It can't work directly with Chanel and LV, only to find dozens of buyers from abroad, to Chanel and LV's foreign entities to carry out large-scale purchases, and then bring back to China.

Some first-rate and second tier luxury goods companies have a little more control over the supply of goods. Fifth Avenue can buy goods from their overseas agents or Chinese agents, but these luxury companies are only willing to produce a small amount of new products in the same season for sale online, and most of them are also taking over the season products to cooperate.

These products are sold on Fifth Avenue website at a price of 4 to 20 percent off.

Sun Yafei, head of the Fifth Avenue, said Fifth Avenue has already realized its profits, with millions of dollars in sales every month, and many investment companies are pouring in.

Even the "Fifth Avenue", which sells discounted luxury products online, can also make consumers want to go.

The "Milan station" and "Fifth Avenue" surprised the international luxury magnates: all of you purchasing agents and two dealers have made a fortune. If I don't act again, I will suffer a great deal.

So luxury magnates rush to China.

Luxury goods merchants are "on" the new big market in China.

On the one hand, they came to the capital market closest to the mainland - Hongkong came to the market, and on the other hand they came directly to mainland China to open their shops. LV and GUCCI had already opened their stores to two or three inland cities such as Ningbo, Changsha and Shenyang.

What makes these luxury magnates more exhilarating is a statement by Yao Jian, spokesman of the Ministry of Commerce in June 15th: "China will further reduce import tariffs, including tariffs on some medium and high grade commodities. This is the general trend, and there is a consensus among various departments."

Previous investigations by the Ministry of Commerce showed that watches, bags, and

According to domestic media reports, the Customs Department of the Ministry of finance has investigated the comprehensive tax rate of luxury goods for more than two months, and is expected to introduce luxury tariff guidance regulations before this year's national day. The specific measures include: setting up tariff level; concreting tax brand; canceling certain products such as incense and cosmetics tax rates.

The tariff issue of luxury goods has been debated for many years in China. The General Administration of customs and the Ministry of Commerce of China have different opinions. The former wants to maintain high tariffs. The latter thinks that high tariffs exacerbate China's consumption outflow and are not conducive to stimulating domestic demand.

However, the general view from the industry is that tariffs may not be reduced very quickly. Even if tariffs are lowered, it is likely that the relevant luxury consumption tax will be introduced to keep the tax revenue.

It is said that the release of the tariff policy information mainly refers to the tariff of cosmetics, because the tariff of cosmetics is much higher than that of other luxury goods such as luggage and bags.

"Compared to tariffs, we should lower other taxes."

Sun Yafei said.

She refers to value added tax and consumption tax.

However, the loosening of policies and the appreciation of manufacturers do not mean that domestic consumers will buy very cheap luxuries.

Because of China's tax problem, many luxury companies' profits in China are much lower than those in Europe, America and Hongkong. Even if China reduces the tariffs on luxury goods, 5%-10% will only make up for the difference in profits.

"They are reduced from 5000 yuan to 4500 yuan at most, and it is impossible to reduce the" cabbage price "to 3000 yuan.

Sun Yafei said, "like the three top luxury brands of Hermes, LV and Chanel, it is impossible to reduce the price. Instead, they may continue to raise their prices.

For example, Chanel sold 27000 yuan on the Fifth Avenue website in March this year, and only 34000 in May.

Sun Yafei introduced that luxury goods go up 5%-20% every year.

The marketing strategy of top manufacturers is to make luxury goods something that can be added and preserved.

For example, the Birkin package of Hermes is currently waiting for consumers for at least two and a half years. This is a way of "hunger marketing".

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For Chinese consumers, big names have responded with rising prices.

Following the increase in the price of some products in July 2010, the luxury brand vane, the French luxury giant: Louis Vuitton Hennessy group, launched a new round of price adjustment.

Since March 1st, all LV stores in China have raised their prices. Neverfull large handbags rose from 5000 yuan to 6435 yuan before, while the medium-sized handbags rose to 6100 yuan, or nearly 1000 yuan.

Dior's classic bag has increased by about 5% this year. Other watches such as watches and accessories have also been raised.

Celine's smiling face Luggage also rose 1000 yuan at the beginning of this year.

Nevertheless, this does not affect the consumption enthusiasm of the Chinese market.

According to the World Luxury Association survey, in 2010, almost all luxury brands in China had gained two digit growth, and China's share of the global luxury goods market has reached 15%.

More and more luxury brands are expanding their share in the Chinese market through the pformation of self owned stores. Seeing this, Chinese investors can't wait to make the effort to share the fruits of their own market.

From the initial acclimatized to today's like a duck to water, the luxury brand that understands Chinese consumption psychology is creating a miracle of sales.

As of the end of March 2011, China's total consumption of luxury goods amounted to 10 billion 700 million US dollars (excluding private aircraft, yachts and luxury cars), accounting for 1/4 of the global sales share. China has become the second largest consumer of luxury goods in the world.

Since March, luxury brands including Chanel, Dior, Burberry, LV, Celine and Loewe have launched a new round of price rise, with the price range of 5-30%.

This price increase has had a double impact on the hearts of luxury lovers: "fortunately, I was quick to sell, and I knew I had to buy more if I wanted to raise the price."

"Buying up or not buying" is a normal consumption mentality. This is also a strategy for them to enter China.