The Outlook For Top Brands Is Bleak.

< p > Burberry, also known as Burberry, is highly sought after in China.

In the fourth quarter ending March 31st this year, the iconic British brand rose by 11% in the two markets of mainland China and Hongkong.

The brand is looking to open new stores in China's largest market in the world to boost its future revenue.

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< p > however, the future outlook of other top brands is rather bleak.

For example, Gucci group (Gucci) brand and Yves Saint Laurent (Yves Saint Laurent) and Po Tejia (Bottega Veneta) fashion brand PPR group PPR group did not meet the sales expectations for the first quarter, and now the group predicts that the performance in China's world's largest luxury market will not improve.

"In China, we have not seen any signs of improvement."

Mark Duple Duplaix, chief financial officer of PPR group, said at a conference call at the end of last month.

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< p > LVMH has reported its fashion and a target= "_blank" href= "//www.sjfzxm.com/" > leather < /a > business unit (the world's largest luxury brand, Louis Weedon is the main brand of the Department).

Jean-Jacques Guiony, chief financial officer of the Jacques group, said in a conference call held in April 16th that China's demand was "dull" in the past nine to ten months.

He commented that the volume of traffic in most Chinese shopping centers has declined.

The Piaget said that its sales growth in the mainland market may be less than 10% this year, the lowest growth rate in eight years.

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< p > China's growth slowdown this year is also reflected in the industry wide data.

The The Federation of Swiss Watch Industry reported a 26% decline in exports to China in the first quarter.

According to World Luxury Association, a Beijing based company, luxury consumption spending was 830 million dollars in China's most important Lunar New Year holiday (from January 20th to February 20th this year), down 53% compared with last year's Spring Festival.

Leading leather products and watches fell 63% and 95% respectively.

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"P > major luxury companies, of course, blame the slowdown in China's economic growth on the slump in sales, but more importantly, the anti-corruption campaign led by Xi Jinping, which aims at" giving gifts "to officials at all levels, as well as his instructions on frugal and wasteful waste, has led to the prohibit of luxury advertisements in Beijing's state-owned media.

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P, the luxury retailer has to be more cautious because of Xi Jinping's efforts to fight corruption and economy throughout the country.

In the past, it was usually no problem for them to issue "office supplies" bills, so that employees could ask their employers to reimburse them for their personal purchases.

Now, this practice is gradually coming to an end, and the turnover is inevitably affected.

Sales of a luxury brand said, "without these bills, our sales fell by 20%."

"The two digit growth is gone forever," sighed Murong Tao, China's chief executive, Thomas Bouillonnec.

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< p > Murong Tao is undoubtedly correct, but it is limited to Chinese consumption in China.

Beyond China, the future is bright.

When reporting the fall of luxury consumption in mainland China during the Spring Festival, the World Luxury Association also pointed out that Chinese luxury goods consumption abroad increased by 18%.

Half of the sales are done in Europe.

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< p > China's luxury market is divided into two parts.

Bain & amp; Bain reported that 60% of Chinese luxury consumption occurred abroad. (Co.)

This is broadly in line with the estimate of Boston Consulting Group, Vincent Lou partner of Boston (Vincent Liu), Hongkong.

He said that 1/3 of Chinese luxury goods were purchased in mainland China, 1/3 in two special administrative regions in Hongkong and Macao, and 1/3 in foreign countries.

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Less than P, the development of offshore markets is largely due to the fact that luxury goods are cheaper than mainland China.

First, the stronger renminbi makes Chinese stores more expensive.

More importantly, the high tariffs and the pricing strategy that hit the Chinese people have pushed up prices.

LV, which is regarded as an essential luxury in China, is 40% higher than Hongkong, and its selling price in Hongkong is higher than that in other cities around the world.

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< p > pricing differences are making China's luxury stores a big loss.

"A lot of luxury companies may not earn a penny after deducting the high rent in Shanghai or Beijing, but this is a sunk cost in marketing."

Christine Lu, co-founder and Chief Executive Officer (CEO) of Affinity China, a private member network, says Christina.

She said that the establishment of luxury stores in mainland China is mainly aimed at gaining "brand influence share", which affects the rich through domestic display products.

Last month, Philippe Leopold-Metzger, chief executive of the count's watch, said that the profitability of its Chinese business was "not really important" because the watch manufacturer was trying to attract Chinese consumers to spend overseas.

This remark indirectly affirmed Lu's view.

By the way, the count watch is slowing down the speed of opening new stores in China.

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< p > in fact, as luxury companies reconsider the role of Chinese stores, these companies are gradually giving up their rapid expansion in China.

"Their real stores are located in Hongkong or Paris," Renee Hartman, a luxury consultant in China, pointed out. "Their Chinese stores are just Renee facades". "Hartmann"

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Not surprisingly, P stores in China are now developing customer reception business.

Tourists from mainland China pay deposits in the mainland and pick up the goods in Hongkong.

When people were rich, they were dragged abroad without making any promises of shopping.

Retailers of watches, jewellery and handbags have actually become tourist agencies.

"For real VIP customers, they provide all services that they think are necessary," said Tang Shide Torsten Stocker, director of consumer affairs at DDT Deloitte Monitor.

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At P, China's luxury market continues to flourish.

It's not confined to China.

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