Analysis Of The Causes Of "Closing Shop Tide" Of Luxury Goods: Strategic Mistakes In The Chinese Market!

After the first half of the Chinese market "price cut tide" after the "

The industry has recently begun to "shut shop tide".

French luxury brands are reported.

(LV) closed its location recently.

In addition, Louis Weedon also plans to close 5 to 6 stores in the mainland.

Last year, Hugo Boss (HugoBoss) closed 7 stores in China and closed 4 by Burberry. Since this year, the number of Prada (Prada) stores in China has dropped by 30% compared with last year, and the number of Armani (Armani) stores has dropped from 49 to 44.

Overseas media have said that this year is the winter of the luxury goods industry, and many brands' performance has dropped sharply, and the main reason is that the Chinese market is experiencing a slump.

But I think the market downturn may be only the superficial reason for the decline in luxury sales, but the underlying reason lies in the strategic mistakes of luxury companies in the Chinese market.

First, luxury companies are too optimistic about the Chinese market.

In the past few years, many luxury brands have been expanding, opening stores in China's second tier cities, and some even to the three and below cities.

Take Harbin as an example, a street is 1 kilometers away, and two Louis Weedon stores have been opened.

Whether there is such a large purchase demand in the second tier cities if there are thousands of famous brand bags of tens of thousands of yuan and whether the three and below cities have such purchasing power, it is really necessary to make a question mark.

Secondly, Hai Tao has become the first way of consumption that many Chinese people buy when they buy luxury goods.

Many luxury goods in the Chinese market are priced at least 1/3 higher than their local prices. Despite the factors related to taxes and logistics costs, it is undeniable that luxury brands are priced too high in the Chinese market.

In March this year, Chanel (Chanel) took the lead in reducing prices in the mainland market, but the price of many classic items remained unchanged. Such a price reduction was only temporary.

Finally, the emergence of the electricity supplier also has a great impact on the luxury brand entity store.

With its brand positioning, most luxury brands have long refused to take the electricity supplier route.

However, online shopping has become one of the main selling channels for luxury goods with the growth of post-80s or even 90% of luxury consumers.

At present, some luxury brands such as Chanel have launched e-commerce services in foreign markets, but in the Chinese market, most brands are still very slow.

Besides, the attitude of Chinese consumers to luxury goods is changing.

Every day, the UK has observed: "the new confidence of Chinese consumers has made them reluctant to listen to Western luxury brands.

In the past, it was a way of showing off, but now it has switched to personal interest and lifestyle. "

Although the sales performance of enterprises is related to the economic cycle and market prosperity, the author suggests that luxury brands should lay down their positions to truly understand the Chinese market, which may be a new way out for luxury goods.