New Situation Compels Luxury Brand Adjustment Strategy

After 10 years of prosperity,

Enterprises have a headache in China.

According to Bain's report, their sales in mainland China will grow by only 8% in 2012, just 1/4 in 2011.

The Chinese market will undoubtedly grow two times in 5 years, reaching 15 billion euros this year, but the growth rate is slowing suddenly.

"After last year's perfect performance, this is normal".

Yang Qingshan, a university luxury research expert, said.

However, some market participants were surprised by the slowdown.

Burberry issued a warning to its performance in 2012 a few months ago.

Over the past few months, China's luxury market has been increasingly cloudy.

Some observers believe that the recovery of the luxury goods market will wait until a year later.

Unfortunately, the appreciation of the renminbi relative to the euro has led to the price of the commodity stores in Beijing and Shanghai.

The price gap between stores in Rome and Milan has widened, forcing some Chinese travel more frequently to buy directly from the country where the brand is located.

Joel Mongolfier, senior manager of Bain, has a more balanced view: "there is no need to make a fuss. Chinese people have no reduction in foreign purchases."

This year, the Chinese will surpass the Americans, become the world's first luxury customer group, and occupy 1/4 of the global purchase: in the total sales of 212 billion euros, Chinese buyers will contribute 53 billion (38 billion of them are from the mainland of China).

The new situation has forced luxury companies to adjust their strategies and bear the brunt of leading enterprises in China.

Joel Mongolfier said: "from 2008 to 2011, the number of exclusive stores increased by two times.

By the end of 2011, the 20 largest brands had nearly 890 stores in mainland China.

Some brands have begun to slow down the pace of opening stores, and the chill will spread.

A participant in the Chinese market said: "now it has entered a stage of consolidation and contraction.

In the case of crazy growth and fierce competition, some stores are hasty in places of little significance.

Some shops will be closed, sometimes to better manage other new shops. "

The priority is to make all shops profitable.

Chinese consumers are becoming more and more familiar with luxury goods, and their new habits also force brands to change their products.

Lei Rongfa, President of Hermes China, said: "an increasing number of Chinese people appreciate the technological value and inner beauty of our products." LeoLUI

The increasingly mature Chinese market is becoming increasingly high-end.

A Chinese businessman in the market said: "obviously, some Chinese customers are tired of some luxury luxury goods, and their demands for personalization and uniqueness are getting higher and higher."

Louis Weedon and Gucci have launched a series of leather and branded leather bags, which are growing more rapidly.

They hope to accelerate the recovery of sales growth in China.

Lei Rongfa said: "the Chinese market is not very good this year, but I think this is only a temporary phenomenon, and it will be renewed again next year.

Driven by economic vitality, it will maintain a very high growth rate in more than ten years. "