Commodities Are Rising And The Depreciation Of The Renminbi Has Great Impact.

Even if the value of the RMB depreciated by 20%, it would be very difficult for these companies to reduce their sales to 5%.

The weakness of the renminbi not only makes Chinese consumers spend more money on buying foreign luxury goods in China, but also makes them travel to New York, Italy, Milan and other cities to spend more on luxury goods.

"Prices are rising, people are reducing travel, and market turmoil is causing people to retrench and rethink their spending on luxury goods," said Simeon Siegel, a senior stock analyst specializing in retail and luxury goods at Nomura Securities. "So walking across Fifth Avenue, you will find that stores are even more deserted." Simon Siegel said.

Nevertheless, Luca Solca Solca, head of global luxury banking at Exane securities in Paris, said it is important to take a comprehensive look at the effects of market turbulence and currency devaluation, Luca. According to the simulation of the operation of suer card, the depreciation of RMB 5% will reduce most of its global luxury brand sales by less than 1%, including Boboli, Hermes, Prada, Louis Vuitton Moet Hennessy and Swatch group.

"The usual situation is that the market will react violently to major accidents, that is, a way to" shoot first and ask questions again, "Solca said." the situation at the moment looks like financial turbulence rather than turbulence in the real economy. But if we continue to develop, to a certain node, it will also have an impact on the real economy.

Zhou Ting, director of the the Fortune Character Institute, which is stationed in Shanghai and publishes annual China luxury report every year, said that despite the uncertainty of the market and the depreciation of the renminbi, she expected that Chinese luxury tourism would continue.

She explained that because of the high tariffs, a Furla handbag that her company had identified had the highest discount in the country, and it cost 1980 yuan (310 US dollars) recently, while the the Leonardo Da Vinci airport in Rome was priced at only 1/3 of this amount. "Da Vinci"

"The recent devaluation of the renminbi is not enough to curb the strong impulse of Chinese consumers to buy luxury goods overseas," she said.

In Taigu, in the heart of Beijing. Shopping Mall A lot of them are luxury retailers like Lang Wen, Lanvin, Versace and Versace Vera Wang. Several shoppers are disregarding the recent trend of the renminbi.

Xu Zijin, a 19 year old Xu student in California, said she usually buys luxury goods in the United States because "China's prices are always so high", and she will continue to do so in the future. "Zijin"

Oliver Chen Oliver Chen, a retail analyst at Cowen Group, said in a recent report that for some brands, such as the vast majority of handbags in China, the depreciation of the renminbi may even be a positive factor. Oliver Chan said that if the exchange rate is kept at the present level, for example, the reduction in input costs, especially the decrease in the wages of Chinese workers, will be conducive to the gross margin of the company.

Andya Seaan Resnick, Andrea Shaw Resnick, said that it is too early to predict the impact of the weakening of the renminbi on sales trends.

Nevertheless, "we have managed to deal with exchange rate fluctuations for many years," Resnick said. "The important thing is that our purchases in the region naturally provide us with a certain degree of protection, whether finished or raw materials," he said. "Of course, we will continue." Monitoring situation Development. "

Ultimately, the future of China's luxury consumption and who will be able to attract a larger share will depend on the longer term trend of global currencies and the domestic economic growth of various countries.

The euro and yen have fallen by nearly 10% in the past 12 months. Thanks to the weakness of their currencies, the euro zone and Japan's economies have been boosted by the influx of Chinese tourists, even after the recent devaluation of the renminbi.

On the other hand, for a year, the dollar has strengthened against other major currencies. Although the yuan has recently depreciated, the US dollar has appreciated by 4% against the renminbi 12 months ago. The strong US dollar is putting pressure on the US's tourism expenditure; Messi's Department blamed the second quarter's poor performance on the decrease in tourist income.

"European tourists, Chinese tourists and Brazil tourists all over the world, but they do not come to the United States," Messi Terry, chief executive of department store, J. Lundgren (Terry J.Lundgren) told the consumer news and business television channel (CNBC) last week that "the strength of the US dollar is affecting this."

Japan Handbag brand Samantha Vega, a 25 year old employee, Mika Tsuruta, was smoking at the side of a giant robot outside the shopping centre of times square in Hongkong, Mika. She usually works in Tokyo, but the retailer sent her to a store in Hongkong to train customers in customer service.

During her stay in Hongkong, she noted that Chinese consumers are looking for cheaper alternatives to luxury brands. Samantha Vega just meets this requirement. The handbag of the Japanese retailer is priced at HK $2200, but it is only a fraction of a HK $34 thousand Chanel handbag.

"They said they were looking for something cheaper," she said.

Leo, a 18 year old student in the eastern province of Jiangsu, is about to start her college in Hongkong when she was visiting another luxury shopping center in Hongkong. He photographed through the window of Dupont (S.T.Dupont) store, concentrating on the display of gold pens and lighters, and the advertisement of the British royals.

Leo hopes to use his English name only. He insisted that the key to his shopping is not shopping. He said that the economic situation and the depreciation of the renminbi worried their families.

"It means that I spend more money on school," he said. "We don't want to buy too much stuff."