LV encounter LOGO fatigued in China

Luxury manufacturer to enter the Chinese consumers rely on for a long time been keen on the buy price up to $ 1,000 bags and other single product high price lucrative earnings. Now, Chinese consumers aesthetic changes, and these changes are likely to slow the rapid expansion of the luxury brand in China.

        Major cities such as Beijing and Shanghai, everywhere LV bags, Gucci wallets and Omega watches. Consumers avoid to purchase a high degree of recognition products covered logo pattern, but more likely to buy something different single product.

        "With the luxury goods industry matures, the Chinese people in the purchase of luxury goods more experienced not just to show off." To Euromonitor luxury to study global president Fflur Roberts said.

        According to HSBC estimates that after the collapse of Lehman Brothers in 2008, European and American consumers prefer to choose the low-key costly luxury, which might lead to greatly reduced LV and Gucci sales. Until recently they reverse the situation, the second largest economy in the world, countries have sold half of the bag.

        Such sales also occurred in other old luxury like Bottega Veneta and Yves Saint Laurent, they belong to the same PPR luxury goods group. Despite this year's economic growth situation downturn demand growth has sounded the alarm, but they still achieve a three-fold sales growth. Compare cheap bag manufacturers like Coach may benefit from more, because more and more consumers in order to avoid cash depreciation and steering investment bag.

        Sustainable consumption

        "Chinese consumers still have strong spending power, but their consumption is completely different luxury companies now compared to five years ago, they need to spend more thought on consumers. This is the balance the problem. "the Luxe Corp president of the Paris luxury consultant Uché Okonkwo said.

        Second quarter, China's gross national product (GDP) compared to earlier this year, an increase of 7.6%, the slowest growing season in the past three years. According to Euromonitor (Euromonitor International Company) China is the world's fifth largest consumer of luxury goods in 2011 the consumption of luxury goods totaled $ 92 billion.

        Large-scale prices

        By Gucci and Burberry LV, PPR Group made the reaction, they raise the price of the product, introduce more animal fur products worth $ 4100 snake pattern shoulder bag and Burberry 6000 pounds, alligator grasping like Gucci package, at the same time to enhance the brand's image.

        Recent sales report, however, shows that this strategy does not onset. Burberry said since August of this year, same-store sales have declined, Chinese tourists to travel to Europe to spend less and less money in a trench coat and other products.

        "We are the first to inform the sales decline, but we will definitely not be the last one." Burberry's CEO Angela Ahrendts said in the 2013 spring and summer when the end of the London conference.

        September 19, after the end of the press conference of the Milan Fashion Week Gucci, CEO Patrizio Di Marco refused to make any comment on the company's performance. PPR Group in October will release third quarter financial statements. LVMH luxury goods group, said a spokesman for the next month will release quarterly financial statements, refused to comment Vuitton sales. HSBC predict the contribution of Chinese consumers account for about 25% of global luxury goods sales.

        Logo fatigued

        With the more and more and more domestic consumers to foreign travel, designer clothes, accessories stores in Europe and the United States turned out to be cheaper than the domestic price half, which also led to the sales of luxury goods in China gradually put slow. Ahrendts also emphasized the decennial national leaders aspects also affected the sales of luxury goods, because many people are slowing down the rhythm of giving, wait until the last to see who is the real power.

        Prada bag series than LV prefer to use leather material, it is realized that the little logo of the product can be used to distinguish between LV products, so you can think of those LV provide consumers with another option. The Prada head of said yesterday that although the current economic situation is getting worse, but same-store sales did not decline in the last two months.

        "LV, Omega and some other big brands are already there are signs that they are being experienced by the brand Shenmeipilao period, because they are the first to enter the market we summarize these as 'preconceived shortcomings'. HSBC analyst Erwan Rambourg wrote.

        Luxury "normal."

        LV has 39 stores in China, Gucci has 54 stores in 66 stores, Burberry, Hermes has 21 stores. And Hermes last month increased 2012 sales growth target, because the first half of the proof of income they underestimated consumer demand in Asia.

        The Hermes the absolute luxury sector has always been the competitive advantage, but also the fastest-growing part of the market, will continue to maintain good momentum in this area until 2014.

        The fingertips likely becomes too "ordinary" Hermes CEO Patrick Thomas warned on August 31 this year, the manufacturer of scarves and Birkin bags, because these single product sales in Asia in the first half The sales volume increased by 25%. Paris, the company estimates that sales in the second half of this year would not have come down to the planned by control store expansion to protect the image of the product. Five years in the future, the world to open up to 20 stores.

        More warning

        Burberry the surprisingly's warning so that some analysts are more worried about the LVMH Group. UBS (Swiss Bank) Eva Quiroga, already the the LVMH company's credit rating reduced to moderate, lowering estimates for the second half of the company's sales of clothing and other leather goods. This part of the LVMH Group, the largest and most profitable business, revenues will increase by five percent to six percent compared to the first half of 2012 decreased by 10 percent. Quiroga also predicted LVMH's total revenue will increase by 8.5% in 2012, dragging the hind leg of a European luxury part of the average 9.2% increase in the amount of such performance.

        Hermes and PPR luxury part of the Group may be better, the growth in the amount of between 12% to 13%, but the PPR Group's Gucci may continue to decline. Prada estimated sales increase of 15%.

        The luxury beauty that they are very scarce, so that they will become very expensive. You do not want to pay big bucks to buy not scarce. Neev Capital, founder and general manager Rahul Sharma concluded.