Luxury Firms Cut Prices To Attract Chinese Consumers
$BURBY, $COH
Luxury brands targeting Chinese consumers are having to reassess their pricing strategies and product mix according to new research showing these shoppers are becoming increasingly shrewd in their buying habits.
A recent survey highlighted a 5.6% increase to 25.6% from Y 2015 to Y 2016 in the proportion of Chinese travelers buying Chanel products, a shift it linked to a decision the French luxury brand had taken in March 2015 to cut prices by up to 22%.
That was a significantly greater uplift than other brands, including Coach (NYSE:COH), Hermès, Burberry (OTCMKT:BURBY) and Fendi, which had also seen more overseas Chinese tourists choosing them. And there was a near 8% rise to 26.1% among millennials choosing Chanel.
“Chinese consumers are no longer willing to pay any price for luxury and do not see price as the sole measure of prestige,” according to the research data.
Management consulting firm Oliver Wyman reported similar findings from its Chinese Travellers survey, with range and price the top criteria in choosing a shopping channel – departments stores/malls and airport retail outlets are popular, while “the most important reasons when making a purchase are product authenticity and price”.
Despite the multiple challenges the luxury market is facing: slower economic growth, a crackdown on corruption and gifting, a growing preference for experiences over products “brand appeal is still strong”, said Jacques Penhirin, managing director of Oliver Wyman, Greater China.
He suggested that buyers are now more mature, more informed and more interested in buying items that are personal signifiers as they are no longer just “buying the ultimate Logo” as a gift for someone else.
Stay tuned…
HeffX-LTN
Paul Ebeling
The post Luxury Firms Cut Prices To Attract Chinese Consumers appeared first on Live Trading News.