The Wave of Luxury Price Cuts in China.docVIP

The Wave of Luxury Price Cuts in China 　　The news that French luxury Chanel lowered its product prices by 20% in China’s stores made a big splash， sparking a buying spree for a few days. In megacities such as Bejing and Shanghai， consumers， mostly women of all ages， rushed to Chanel stores immediately after hearing the news， leading to a very long queue outside the stores. 　　By contrast， the luxury brands hiked prices in its European stores. According to Chanel， the price shift is aiming at reducing price differentials across countries. 　　It is noteworthy that Chanel’s move came after e recent depreciation of the euro that experienced a 24% decline against the dollar over the last 12 months. 　　For luxury brands， harmonizing their global pricing is inevitable. According to industry experts， Chanel’s move to cut prices in the mainland China signals that there will be a large number of luxury brands to be involved in the wave of price cuts. 　　Expectedly， following the benchmark brand’s price cuts， other luxury brands， such as Patek Philippe and Tag Heuer， also slashed their prices in China. Recently， Versac and Prada announced that they would adjust prices this year. 　　Moschino said that prices of its new collections， including handbags and accessories， would be lowered by 20% starting from April 13. 　　 Overseas Purchasing Agent Business Collapses 　　China benefits from the wave of price cuts. Take Chanel for example， after the price shift， the price spread of its products between China and Europe is narrowing from about 60 percent to around 5 percent. 　　“Buying a luxury brand is much cheaper in China now，”says a customer. “A Le Boy Chanel handbag is sold at a price of 26，000 yuan in China now， much below the previous price of 32，700 yuan， while buying a same handbag in Europe costs 3，720 euros， or 24，672 yuan， 620 euros higher from previous 3，100 euros.” 　　According to the customer， she used to buy bags herself during her business trips to Europe， or from