Luxury goods fall into the growth trap

The day before yesterday, the luxury goods market research institute Wealth Quality Institute released the annual “China Luxury Goods Report” (hereinafter referred to as the “Report”). The report shows that, in order to benefit from the growth of emerging consumer power, the global luxury goods market will reach a total capacity in 2013. A record of 217 billion U.S. dollars, the annual growth rate is expected to reach 11%. However, continuing to open stores and over-pursuing profit maximization also makes luxury goods fall into a growth trap. Future high-asset core consumers will intensify the escaping from luxury products that are already well known and flooded, and luxury brands will usher in a large-scale recession. The industry believes that if luxury brands want to break through, they can no longer rely on Logo and brand names, but must rely on the integrity and value of the brand.

Status Quo: Emerging market growth reports show that in 2013, although the global luxury goods market is facing many pressures, the total global luxury market capacity will reach a record of 217 billion US dollars, and the annual growth rate is expected to reach 11%. Among them, China’s luxury goods market will reach US$28 billion in local consumption; foreign consumption will further increase to US$74 billion, which means that Chinese people’s total luxury consumption in 2013 will reach US$102 billion, or more than 6,000 billion ***.

“The main driving force for growth has been the growth of emerging consumer forces and the increase of new stores in new markets.” Zhou Ting, president of the Fortune Quality Institute, told the China Daily News that opening new stores in new markets is the main source of growth in luxury sales. Even if the major luxury goods groups control the opening of stores, the average store growth rate in 2013 will still reach 9%.

At the same time, these stores have also become "living advertisements" for luxury goods, attracting more consumers to the consumption of luxury goods origin, and further driving up the consumption of luxury goods in Europe and the United States. On the contrary, the consumption enthusiasm of luxury consumers in Europe and America began to decrease.

Concern: The growth rate has slowed in the past two years. Although overall sales are still rising, it seems to be gone forever, compared with the double-digit increase in the previous two years.

The reporter compared the research data in recent years and found that from 2007 to 2011, the compound growth rate of the Chinese luxury goods market reached double digits in five years. However, by 2012, the growth rate was only 7%, and this year it is expected to increase by only 3%. %, fell to the lowest point in recent years. Yesterday, the reporter reviewed the third-quarter financial report released by LVMH Group. Among them, the Group’s core department’s fashion and leather products division’s revenue was approximately US$3.3 billion, a decrease of 3.8% from the same period of last year.

In addition, the third quarter financial report issued by Gucci and Bottega Veneta, the parent company of Bottega Veneta, also showed that as of September 30, the Group’s third-quarter revenue fell by 1.5% to 2.52 billion euros. For the first time, Kaiyun Group acknowledged that Gucci China's sales fell, but declined to disclose specific data, only expressed as "single digit".

Reason: After the popularity, it is hard to say that luxury “continues to open stores and pursuing profit maximization but has little maintenance on the brand and negative anti-counterfeiting. This has caused many luxury brands to fall into China's development cycle.” A few days ago, famous brand strategy expert Li Guangdou told the company Reporter, this is the biggest problem that many luxury brands have encountered in China. “Especially for some new brand stores, the pace of expansion has begun to develop towards popularity. This approach has deviated from the positioning of high-end luxury goods. The direct overdraft is the brand value, resulting in a serious decline in brand value.”

In Zhou Ting's opinion, the luxury products represented by LV, Gucci, Cartier and other brands have exceeded the market's visibility as a reasonable critical point for luxury brands, further mass market sales, and the inaction of counterfeits to make their brands The value will be further reduced and the potential for market development will be further limited. “In the future, the escaping of high-asset core consumers will further intensify, while the increase in the marginal consumers of medium-sized assets will further slow down.” Zhou Ting said that in the next 3 to 5 years, luxury brands will usher in a large-scale recession. .

Response: In spite of this, the world’s major luxury goods giants have never stopped their “smoke cigarettes”. In addition to continuing to open stores, large-scale luxury goods groups such as Kaiyun Group and Ferragamo have already The focus has shifted to upgrading existing stores, cultivating single store performance, and increasing product availability and services.

Jean-Francois Palus, the chief operating officer of Kaiyun Group, has said publicly that it will change the location of the store in the same city. Reporters visited Liberation Monument, Guanyinqiao and other business districts and found that the flagship stores of luxury brands such as Gucci, LV, and BV have all completed renovations. After re-appearing, the facades and curtain walls are brighter than before.

Zhou Ting said that in the face of growing Chinese consumers, luxury goods stores have begun a new round of expansion. Today, in the face of the "winter", only through greater sales space, higher-end store design, and even do not hesitate to play The "cost-effective" card is disguised as a way to expand and improve its competitive advantage in China.

Intensive Luxury Goods Consumption Turns No Logo to Sell Better In the traditional view, the brightly-designed Logo can attract the attention of emerging markets like China, but obviously, things have changed.

“The big streets are filled with Logos. Aunts who busses buses and aunts who sell vegetables are all LV and Gucci. They are really a bit fatigued.” Ms. Sun, a mid-level executive in a communications agency in our city Telling reporters, compared to the luxury brands full of logos, she prefers brands and styles that are not dewy, low-key in design, and “have a higher sense of quality”.

Like Ms. Sun, these high-end fans who are pursuing luxury goods are no longer proud of Logo, but have transformed into consumer product quality and practicality. This may be one of the market demands that the big names are busy catering to, and they are beginning to move toward more low-key luxury. Francois Henri Pino, PPR Group's CEO and CEO of one of the three giants of the global luxury goods industry, has publicly explained the reasons for its downplay of the Gucci brand logo. "Compared to our sales growth rate, Gucci sales have been falling.

“The Logo era is gone forever.” He Bin, a senior luxury individual, told Business Daily that in today’s and future luxury market, consumers’ buying behavior no longer depends on Logo and brand names, and future brands want to break through. Must rely on integrity and value.

It is worth mentioning that this adjustment of luxury goods has obviously played a significant role in saving the market. Gucci has now tasted the "No Logo" sweetness: the latest financial report shows that Gucci leather goods category benefits from new products. Launched a double-digit increase in sales of Logo-free leather goods.

Going to the New Way of Logo-based Luxury Products In the LV brand show at Paris Fashion Week in March this year, LV's former creative director Marc Jacobs has thrown a "heavy weight": "LV Monogram" and Damier canvas. (Checkered canvas) series will not appear on the T stage in the future.” In the entire LV brand show in 2013, did not see the two most classic signs of LV: two LV letters and dark canvas intertwined Square. Afterwards, this whirlwind that went to the Logo quickly spread throughout the LV stores around the world.

In the LV Chongqing flagship store, the new season's handbags have been on the counter. The reporter saw that a Monogram canvas Neverfull handbag, because of its entry-level price and practical design, as well as the classic LV iconic intertwined letter pattern, has become the first designer handbags for many female white-collar workers. However, on the LV Neverfull Epi new handbag series, despite retaining the classic appearance of the Neverfull series, for the first time, it abandoned the most representative square canvas as a material, and chose a more quality Epi leather. On the unique water wave texture of Epi color leather, there is absolutely no logo for LV intertwined letters.

This also confirms the new brand strategy of Bernard Arnault, Chairman and CEO of LVMH Group, which will reduce the frequency of intertwining letters in the product. He said: "LV will reduce its production year by year and shift its focus to more high-end products with special leather."

In fact, LV is not the first luxury brand to intentionally go to Logo. Prior to it, its rival Gucci had taken a step forward in reducing the production of "Double G" Logo products. In the Gucci southwestern flagship store across the street, the just-backed handbag collection has been placed on the most prominent shelves. The new bamboo bag "Bamboo shopper leather handbag" series, Gucci's iconic "double G "Logo's figure is completely absent, bamboo wristband became the most prominent symbol. The entire bamboo package was designed to look square, including only a small line of origin and the smaller Gucci.