Articles
Louis Vuitton's Price Rise Comes Before a New Wave of High-end Consumer Brands
by Min Leung Saller News of higher prices for high-end consumer goods in 2023 is coming in frequently. Word is that Louis Vuitton will raise prices globally by "8-20 per cent" on February 18th. After the news broke, queues sometimes appeared in front of Louis Vuitton stores in high-end shopping malls such as Deji Plaza in Nanjing and Henglong in Shanghai, with consumers often citing the desire to "pull the wool" before the price rises. "Is it possible to hire people to stand in line?" one netizen joked about the popularity of the phenomenon.Louis Vuitton to raise prices again? As the news spread, the queues that preceded higher prices for high-end consumer goods were repeated.
LVMH Group's 2022 financial results show that the group's annual revenue increased by 23% year-on-year. Revenues at its Louis Vuitton brand topped €20bn for the first time.
Rising prices are the norm, and high-end consumer brands never seem to lack customers. A report released by the British bank HSBC suggested that in some cases, demand for high-end consumer goods is outstripping supply, which means consumers will keep buying and are willing to pay higher prices.
The industry is also generally full of confidence in the future of the Chinese market.
China's high-end consumer goods market will return to a positive trajectory by the end of the first quarter of 2023, according to the report "China Luxury Market 2022" released by Bain & Company on Feb 7.
Bernard Arnault, chairman of LVMH Group, said that the optimization and adjustment of China's epidemic prevention and control policies have brought LVMH a strong start in 2023, and he is full of confidence in the Chinese market. Especially, the Louis Vuitton handbags
'We continue to be positive about the high-end retail market in mainland China,' said Peter Lo, chief executive of Hang Lung Properties, at the earnings conference. "In the past Spring Festival, our shopping mall's customer flow and sales are better than expected. I hope this momentum can continue and we can break the highest record in the future."
Global partner of Bain & Company, said that as the impact of the epidemic fades, high-end consumer goods consumption in the Chinese market will gradually recover, while shopping mall traffic and consumer confidence will also rebound, and high-end consumer goods sales are expected to return to the level of 2021 in 2023.
The reporter noted that Francois Henri Pinault, Chairman and CEO of Kering Group, has led his brand executives on a trip to China. Next, Cartier parent Richemont Group and other high-end consumer group executives or brand leaders will also visit China.
Industry insiders generally believe that the visit of the heads of high-end consumer goods brands undoubtedly shows the confidence of the major brands in the development of the domestic high-end consumer goods market.
"While the outlook for the New Year is positive, it also contains hidden risks." For high-end consumer brands, the focus in 2023 is to control the large price gap between the Chinese market and the rest of the world, while also providing a borderless customer experience and VIC customer relationship management, Xing said.
According to Bain's report "China Luxury Market 2022", there is still a wide price gap between high-end consumer goods in China and Europe. In 2022, the price gap between leather goods in China and Europe will reach 25% to 45%, before taking into account VAT rebates (10% to 12%). Among them, the price difference of entry-level high-end consumer goods (less than 10,000 yuan) is higher than that of more expensive high-end consumer goods.
Some consumers say the price gap between China and Europe is wide and they will consider buying abroad. At the same time, the service of the sales staff of high-end consumer goods in China is not satisfactory, which is also widely criticized.
While high-end consumer goods are not lacking in sales in China, industry insiders generally agree that high-end consumer brands should constantly adjust their business strategies and guidelines as consumer trends change, to find a balance between maintaining brand tone and catering to market needs.
At the same time, the industry also reminds that high-end consumer brands certainly have their excellence, but for ordinary consumers, consumption should be based on the existing economic basis of individuals, living within their means, moderate consumption, not to follow the trend and overdraft consumption.
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About Min Leung 
Saller
14 connections, 0 recommendations, 73 honor points.Joined APSense since, June 14th, 2014, From Guang, China.
Created on Feb 13th 2023 07:48. Viewed 152 times.
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