The luxury industry raises prices in Beijing. For example, Louis Vuitton increased its retail prices by nearly 4% during the last year, according to Deloitte’s BenchMarque’s calculations. The strategy used here is the opposite of that implemented by the Parisian brand in the last 12 months. In fact, LVMH chose to lower its prices to help the local government with its goal to lower internal consumption.
Not just Vuitton
There are three concrete examples that testify to this move. The Dauphine handbag went from 21,300 yuan to 23,200 yuan; the Neverfull increased from 10,000 to 10,900 yuan; and the Speedy 25’s price grew from 10,900 to 11,800 yuan. Same choice was made by Chanel, which chose to increase prices in China at the end of October, but in this case the increment was higher than Vuitton’s: between 10% and 12%. Moreover, Dior increased prices between 6% and 14%. Bottega Veneta is also part of the group that chose to increase prices.
Banks’ forecasts
Credit Suisse believes that more is coming. In other words, luxury brands are increasing prices in China, and more. According to the mentioned financial institution, it is to be believed that luxury brands have increased their prices in China, and will do so in their other key markets as well. What’s happening in China though, is a normalization of the brands’ practices, as they have also maintained higher prices in China than in Europe and the United States. For a series of reasons (among which is e-commerce), they chose to uniform them across the world. They are re-verting the direction.
South Korea as well
Brands also chose to increase prices in South Korea. They started doing so in November. Beijing Business Daily, local newspaper, noted how this shift in pricing model was first done by Vuitton and Chanel. Dior, Bvulgari and Cartier, on the other hand, are getting ready to follow.
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