2013 China's luxury purchases may reach its lowest point

According to the “2013 China Luxury Market Forecast” published by the World Luxury Association, the Chinese people's purchase of luxury goods for the Spring Festival 2013 reached the lowest point in five years.

On February 27th, a luxury goods sales company in Chaoyang District, Beijing received an order. The ordering person's display is a ** company's personnel department, but the receiving address is filled with a home address in Beijing.

Seeing the orders, the company’s CEO smiled and said, “Look, the order of the government address has never happened again.” After the Spring Festival, the company’s group purchasing business basically disappeared, and the most thorough orders disappeared from various sources. Enterprises and institutions.

In February of last year, the business of luxury goods was extremely strong. The "2013 China Luxury Market Forecast" published by the World Luxury Goods Association on February 26 shows that Chinese people have purchased luxury goods for the Spring Festival this year at the lowest point in five years.

On October 1, 2012, the State Council promulgated the first administrative regulation "Administrative Regulations on the Administration of Organs" that specifically regulates the affairs of public affairs and was formally implemented. Among them, "all government departments should purchase affordable goods and not purchase luxury goods" was put forward in plaintext.

According to Ouyang Kun, the representative of the luxury goods association in China, “nearly 60% of the domestic luxury goods market is the gift market for repeated purchases.” How can such a large market be recovered? Ouyang Kun said that now he can hear the brand merchants joke, "We must take the road of the luxury goods market with Chinese characteristics."

This is not simply a matter of saying that brand owners have conducted in-depth studies for this purpose. They believe that after the new leader came to power, it must be the trend for a long time to come. The company must make corresponding changes.

How to change? Bottega Veneta, a luxury brand, is a wonderful example of design cryptography with “Chinese characteristics”.

Unclear and specific to the "Chinese characteristics" market, on the eve of this year's **, there are a number of occupations parasitic in the sales chain is in desperate situation. “Guests who are receiving gifts are real users, but they cannot leave any information, but a considerable portion of guests who give gifts do not come forward. They need middlemen,” said a sales consultant. Some of these intermediary agencies specialize in government procurement lists.

In previous years, one of the best-selling categories was watches. Among them, Hendry listed in Hong Kong is a leader, the company agents CARTI-ER, VACHERONCON-STANITIN and other top watches.

Informed sources disclosed to this reporter that Hengdeli's inventory was very strong at the end of 2012. For this reason, several internal specials have been held to invite familiar VIPs and internal personnel to participate in 50% off purchases.

In addition to Hendry, inventory rises include OrientalWatch and EmperorWatch & Jew-ellery. **The CEO of Watch and Jewelery, Zhu Jitao, said that the decrease in the number of large loyal customers from the Mainland has slowed the sales of high-priced watches. The company expects that turnover will only be flat at most in 2012.

A Swiss watch agent in mainland China said that after the central government signaled its determination to increase anti-corruption last year, sales of high-end watches fell. The decline rate of first-line brands was 30% to 40%. The higher the reputation, the higher the price. The more you can't sell, the opposite. Mid-range brands such as Longines and Tissot are almost unaffected.

In addition to the Swiss watch brands, the well-loved brands LV, Gucci, and Burberry enjoyed a generally weak sales growth in China in 2012. Bain’s report confirmed the above facts. The company expects that the growth rate of the Chinese luxury goods market in 2012 will increase. The 30% dip in 2011 was 7%.

In the report of the second half of 2012, HSBC pointed out that the atmosphere of Chinese society is changing, and the supervision atmosphere for wealthy classes has become more and more intensive. "The ethos of purchasing luxury goods for women other than the second lady or girlfriend is disappearing." Coupled with the fact that China is facing an alternation of power, there has also been a gradual reduction in the sale of luxury packages or watches to corporate stakeholders and senior officials.

Ouyang Kun, head of the luxury goods association, said that he has been able to see how brand owners are trying to recoup this huge market. The agency will then publish a study on the "Holiday after the luxury market" research.

In addition to the internal specials like the Hendry Watch, how to deal with "advocacy for thrifty consumption of Chinese luxury goods", in the eyes of the industry, one company has done a very beautiful, this is Bottega Veneta.

BottegaVeneta is very low-key, but its growth performance in China is exceptionally good. When sales of many top brands declined, its sales growth in China in the first half of 2012 was as high as 60%.

Ouyang Kun believes that one of the important reasons is that Bottega Veneta put most of the LOGOs in the inner lining instead of the surface of the bag. BottegaVeneta is known for its low-key design without a trademark.

Ouyang Kun judged that this "way" will be followed by many big names. That is, the significance of the product is reduced and the design is repositioned.

Ouyang Kun said that now he can hear the brand jokingly saying, “We must take the road of the luxury goods market with Chinese characteristics. This is Chinese characteristics.” Zhou Ting, president of the Wealth Quality Institute, believes that the thrifty atmosphere on sales of luxury goods in China There is a certain influence, but new consumers are emerging tycoons from second- and third-tier cities.

She judged that investment spending will resume after June. The reason is that after the election, the provinces and cities are stable.

Consistent with Zhou Ting's point of view, many brands are targeting second- and third-tier cities this year. Hengdeli aims to establish 40-60 new stores, of which 90% will open in second and third-tier cities. Hendry Holdings ** Zhang Yuping said that the process of urbanization will continue, incomes will increase, consumption levels will increase, and the momentum of the mid-table will remain unchanged next year. He said that high grades indicate that the year should be to maintain the status quo.

A related person in charge of a leading jewelry company told the newspaper that the jewelry industry as a whole was not affected by the economy and policies. In particular, there was little change in the price of diamonds, but gold-based companies were affected. She said, “If gold companies inventories are large in 2012, they will not be recovered quickly, and gold prices will be affected by fluctuations in the price of gold in European countries. Once they fall, the overall situation of gold companies will not be good this year.”

Hong Kong's capital giant Zhou Dafu (1929.HK)'s 2013 interim report confirms this view, and its net profit has fallen by more than 20%. In addition, due to slow sales and slow-moving inventory in the first half of the year, gold hedged losses.

The newspaper was informed that Chow Tai Fook next focused on the development of middle and low jewellery products with the goal of turning to young consumers.

"Unfortunately, it is because of the low season or policy reasons." Sun Yafei, CEO of the Fifth Avenue luxury goods network, said that "group purchases have probably been reduced by one-third." But Sun Yafei is unusually optimistic. She believes that Internet companies will instead. So benefit. The reason is that customers will go to more hidden channels to buy, this is the Internet.

Ouyang Kun said, “In the past, there were large orders for state-owned enterprises during the period after the year before. Years, celebrations, and customer appreciation meetings will inevitably result in gifts and most of them will be luxury items. Now that the impact has been affected, The more significant are the three brands of LV, Gucci, and Hermès. The remaining truly powerful consumers are buying for their own personal preferences, but they have limited support and luxury brands are raising prices.”

Francois Henri Pino, CEO of the luxury goods group PPR**, said recently that the expansion of Gucci brand stores in China will cease in 2013. Not long ago, Bernard Arnault, head of LVMH, also stated that he would not continue to open stores in second and third-tier cities in China. At the same time, Richemont Group, one of the world's three largest luxury goods groups, will also slow its expansion in China.

The physical store was hit so hard. This is another reason why Sun Yafei is optimistic. As the sales of physical stores were greatly affected, they laid down their original attitude and began accepting cooperation with e-commerce. “How difficult was it to cooperate with the brand before? Now it's better, just cooperating with a family.” Sun Yafei said.

Ren Guoqiang, vice president of Roland Berger Management Consulting Co., Ltd., is the author of "China Luxury Goods Report." He said that because of taxation and gift consumption, China's luxury goods market has long been in an abnormal state of development. Slowing down helps the market return to normal.