Costumes, Cosmetics And Other Big Brands Led To Price Cuts Domino

23 days, Estee Lauder Shanghai announced that its brands will reduce the retail price of some star products. This is followed by the announcement of a price cut by L'OREAL and Shiseido, and another big brand has announced a reduction in price. Why have big brands reduced their prices? Why?

Tariffs are not the main reason for market spreads.

Estee Lauder's brand cuts include all skin care cosmetics brands in the Chinese market, including Estee Lauder, Clinique, La Mer, Yuet wood sources, MAC, BOBBI BROWN and men's skincare brand Lab Series. Among them, Estee Lauder star products include small brown bottle family price reduction up to 14%; Clinique's high efficiency skin care trilogy, the price range of 13%, the full set price of 635 yuan; Yuet wood's source of popular products, Dr. Wei Ling Ganoderma lucidum Essence 50ml lowered the price of 200 yuan, a decrease of 23%; La Mer Essence Cream 60ml, the price will be reduced by 300 yuan, a decrease of about 11%.

The reason for the price reduction, Estee Lauder said, is to support the government's measures to reduce tariffs and boost domestic consumption.

The Ministry of Finance issued a notice on May 25th, and since June 1st, our country has Clothing, shoes and boots 14 kinds of daily necessities, including skin care products and diapers, have cut import tariff rates by an average of over 50%. In fact, tariffs are not the main reason for the price difference between China and overseas markets.

It is understood that imported goods usually have to pay three kinds of taxes, including customs duties, value-added tax and consumption tax. Take a hand cream with a customs value of 50 yuan as an example, the proportion of customs duties, value-added tax and consumption tax is 2%, 17% and 30% respectively. The consumption tax is the largest and the tariff is only a small part.

Price reduction "Bo" domestic market

In fact, before Estee Lauder announced the price reduction, import cosmetics brand L'OREAL, Shiseido, and Luxury brand Chanel has already announced price cuts. Imported goods are blowing "Domino".

"Estee Lauder Co's price adjustment is not only to reduce prices in response to tariff policy, but rather a long-term strategy for consumer relationship management", said He Mu, deputy director of the Institute of enterprise research of Fudan University, the founder of Lian Zhi Da marketing consulting company.

Since last year, Chinese consumers have begun to "neglect" the domestic high-end consumer market. The 2014 China Luxury Market Research Report released by Bain, a global consultancy, shows that in 2014, mainland Chinese consumers increased their luxury consumption globally by 9%, but the first negative growth in mainland China decreased by 1% compared with 2013. In 2014 alone, all the luxury stores in Beijing had all the stores with landmark and flagship stores except for Xinguang Tiandi and China World Trade Center, and almost all stores decreased by 50%-60%. Some analysts say that such data enable the consortium behind luxury goods to start reassessing the strategy of the mainland market.

After Estee Lauder's price cut, the price gap will be narrowed with overseas. Insiders say that this will be conducive to the return of consumption, and on the other hand, it may reduce the profit margin of purchasing agents.