Exchange Rate Causes The Disparity Of Luxury Prices Between China And Foreign Countries

The recent moves in the Chinese market by Chanel and other international brands have also reflected the disparity between Chinese and foreign market prices caused by recent exchange rate factors.

In recent years, the fluctuation of international market exchange rate has led to obvious changes in commodity price differences between China and specific countries.

High luxury goods are even more obvious.

Data show that since the third quarter of 2014, the euro has depreciated nearly 22% against the US dollar. Relatively speaking, although the RMB has slightly depreciated against the US dollar, it does not seem to be important before the depreciation rate of 22%.

This means that Chinese consumers are better off buying luxury goods in Europe than in the past.

Rogerio Fujimori, a Canadian Royal capital market analyst, said in a letter to investors recently that

For the depreciation of the US dollar, the price of luxury goods in China is 60% to 80% higher than that in Europe, compared with 35% in the past.

"Though

The price of handbags has always been higher in the European market, but the current price differential is far beyond the normal level of history.

Some analysts say that because of the widened price gap between luxury goods in Europe and China, more and more luxury goods manufacturers may have to adjust prices globally, including lowering the price in the Chinese market and raising the price of the European market to narrow the price gap.

China is, after all, a crucial market for the luxury goods industry.

In addition, this price differential has prompted the so-called "parallel market" to grow rapidly, that is, individual sellers sell their luxury goods purchased in overseas markets through online shopping platforms, which is not what luxury brands would like to see.

This headache is actually the real reason why Chanel's initiative to cut prices in China and raise prices in the European market.

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Chanel, who never discounted and raised its price every year, suddenly issued a statement: in April 8th, the price of handbags, leather goods and clothing was cut by 20% in the Chinese market. The price cut started from 2.55, Le Boy and 11.12 three classic handbags.

At the same time, Chanel also announced a total increase of 20% in the European market.

Between the rise and fall, the price difference between Chanel and China's European market has been significantly reduced. 11.12 the price of classic handbags in Europe has risen from 3550 euros to 4260 euros, and the selling price in mainland China will be reduced from 38200 yuan to 30000 yuan. The price difference between the two places has shrunk from 1800 yuan to 1800 yuan. The price of Le Boy handbags in Europe has risen from 3100 euros to 3720 euros, and the selling price in mainland China has dropped from 32700 yuan to 26000 yuan, and the price difference between the two places has narrowed to 32700 yuan.

In fact, in addition to the three officially announced products, dozens of other Chanel products have also been reduced in the mainland of China. The price difference between Mainland China and the European market has been controlled within 10%.

Flying Europe to buy two bags can make the return of airline ticket day seem to be gone.

On the second day of the news release, Chanel made a long queue in China's major stores, and the sale of commodities was quickly snapped up.

In addition to Chanel, Dior has reduced the price of two products in China's Hongkong and mainland markets by 10% in early March.

Italy luxury brand Versace also said it would pay close attention to competitors' actions during its 2014 earnings report, which could reduce the price of goods outside Asia.

In addition, Patek Philippe also said it would cut prices by 18% in the mainland market and 7% in Europe.

In addition, brands such as Jaeger Le Coulter, tiger Heuer, and real time have also expressed their intention to cut prices in China before they sell higher prices in the Chinese market than in the European and American markets.

Statistics from a number of agencies show that Chinese consumers have become the largest consumer group in the global luxury market, but consumption in China is less than 30%.

HSBC's report this month also shows that Chinese consumers now consume nearly 1/3 of the world's luxury goods, and 2/3 of them buy overseas.