In the year 2016, the Chinese consumers were found the first increase in the domestic luxury consumption since the Year 2013. Shanghai Dongjin found the below main reasons.
- The price difference is shortened
Chanel started to make price adjust in the Year 2015. Other brands such as Cartier follow up the changes on their price-making strategy in China. It seems that the luxury brands found a way to increase the turnover in China as the price as well as the marketing strategy reformation. On the other hand, due to the depreciation of CNY, the price-difference between China and the overseas and Hongkong was further shortened. It is found that if the price-difference is within CNY5, 000, the local consumers are willing to purchase in China.
- China take more administration on the overseas online shopping
Large-scale operations, involving Chinese nationals based overseas taking orders online and sending packages into China were hit by the introduction in April of import tariffs on packages ordered online.
- China CBDs are still strengthening their international influence power
Although the Chinese people have strong consuming ability, there are no famous CBDs in China as Ginza in Japan and Oxford Street in the UK. As a result, the Chinese government will commit to build up the famous CBD with international influence power.
From Bain & Company insights, in the coming few years, the global luxury industry will grow at the speed as 2% to 3% year on year and the growth in China is critical. China will replace the United States of America and become the largest contributor to the international growth and the estimated proportion will be more than 50%. In the coming five years, China will become the largest market for luxury products all over the world.
Dongjin comments:
The foreign luxury brand should be aware of the big potential market in China. The foreign investor may set up the retail stores and chain shops in China as soon as possible for the purpose of taking over the China market.
If you have any questions, please send the email to me.
Ms. Jojo Hu
TEL: 0086-21-68868335 ext 324 / FAX: 0086-21-68868021
Email: jojohu@shanghaiinvest.com