Mao Wenting
From 00:00 on July 3, French luxury brand Chanel (CHANEL) officially raised the price of Chinese handbags.
"I bought a sweet grandma (Chanel) bag on the 2nd, and the 4th increased by 4,600 yuan." Yesterday, some domestic consumers were already glad on social media that they started in time.
It is reported that Chanel has increased the price of some of its classic style bags such as 2.55, CF and Le boy by 10% to 15%. The new price will take effect in the United States from July 1 and will then expand to other markets.
This is also the third time that Chanel has officially raised its price since the outbreak of the new crown epidemic in 2020.
In May 2020, Chanel said that the price of some bags of the brand increased by 5% to 17% due to the rising costs of certain raw materials and the "consequences of the recent sharp fluctuations in the exchange rate between euros and certain regional currencies". In October 2020, the prices of some Chanel bags rose by another 5%.
Despite frequent price increases, Chanel's performance in the past year has been significantly impacted by the epidemic. According to its financial report, Chanel's sales revenue in fiscal year 2020 was US$10.1 billion, down 18% from US$12.27 billion in 2019; operating profit recorded US$2.049 billion, a drop of 41.4%, mainly because Chanel paid employees' wages as usual during the epidemic and increased its operating expenses.
But the price increase is not just to increase sales. On July 2, a Chanel spokesperson said in an email to the Fashion Business Review (BOF): "Based on the promises made in terms of price coordination, the purpose of making these adjustments is to ensure that the brand does not have excessive price differences between different markets."
price increase is a common move in the luxury industry. Brands usually raise prices once or twice a year based on factors such as raw materials and labor costs to coordinate prices in different regional markets. For example, the price increase on January 1 each year is the usual practice of Hermes , and the range is generally between 4% and 5%.
However, the outbreak of the epidemic has accelerated the price increase of luxury goods. Louis Vuitton experienced four rounds of price increases last year. Gucci (Gucci ), Dior (Dior) and Prada (Prada) have significantly raised product prices in the past year. Rising prices help luxury companies cover lost revenues during lockdowns and travel restrictions.
htmlFor more than 0 years, luxury goods prices in major Asian markets such as China and Japan have been significantly higher. The Korea Times reported that "the number of people queuing in front of the Chanel store in downtown Seoul seemed to be twice as high as usual," after rumors of an upcoming price increase began to circulate.As early as May 2020, when rumors of an upcoming price increase began to circulate on social media, there were long queues outside Chanel stores in first-tier cities in China and South Korea. The price increase of
has also increased the market for Chanel bags in the second-hand market. According to fashion media Ladymax, Chanel is the largest luxury brand in the past two years, and price increases are also a strategy for brands to promote sales. "Encourage customers to buy the products they need immediately to avoid spending more in the future. So far, the strategy has been very effective."
But some people do not agree with this view. "Some people say they are no longer interested in buying Chanel products, because the price is too high."
Overall, unlike ordinary products that focus on practical value, luxury goods sell a sense of superiority and distance. Many fans of top luxury goods are not that sensitive to prices, and rising prices have not yet had a clear negative impact on sales of these brands.
Recently, according to the first quarter performance report of luxury goods giants 2021, after experiencing the impact of the epidemic and price increase response, LVMH Group, Kering Group , Hermes, etc. have all ushered in performance improvements. After excluding acquisitions and exchange rate changes, LVMH Group's organic sales increased by 30% in the first quarter of this year. Kering Group's revenue in the first quarter increased by 21.4% year-on-year, and more than half of the group's revenue came from the Gucci brand. Hermes' revenue in the first quarter increased by 44% year-on-year.
Asia-Pacific market has become the main driving force for the recovery of luxury brands, especially thanks to the impact of offline stores in the Chinese market and online channels.For luxury brands, e-commerce is no longer just a sales channel, but also a marketing platform that can expand consumer awareness.
Editor in charge: Chen Hua
Proofreading: Xu Yijia
