Just a few days ago, because I asked a Louis Vuitton (hereafter referred to as LV) bag, my sales initiative told me: ‘We just adjusted the price, involving all categories of products, a decrease of about 4% ‘Although I had known that the tariffs would be reduced on July 1, I was still guessing whether a brand would follow up and I did not expect the news to come so fast. In addition to LV, another activist is Hermès, which has a similar decline, involving most categories. Just in accordance with the usual style, luxury brands will not take the initiative to announce this. LV’s official customer service answered that due to the adjustment of the country’s import tariffs, the brand has reduced the price of most products. From the official website parity of the rabbit, the Neonoe bucket bag was reduced from 12,300 yuan to 11,800 yuan, Neverfull was reduced from 10,400 yuan to 9,900 yuan, and the 16,400 monogram medium backpack was now 15,700 yuan, basically in the range of 300 to 2,000 yuan. But is the price adjustment really due to tariffs only? The cause is, of course, a new round of import tariff reduction plans announced by the Customs Tariff Commission of the State Council, which was formally implemented on July 1, and the scope of adjustment involves consumer goods and apparel. Among them, the average import tariff rate for apparel, shoes, hats, and fitness products fell from 15.9% to 7.1%. This may seem like exciting news, but it just looks good. Because for luxury goods, tariffs have little effect on prices. The rabbit is an example of the 2013 Sino-Swiss Free Trade Agreement. Swiss watches and clocks began to reduce tariffs from the date of the entry into force of the FTA, which was reduced by 18% in the first year, then by about 5% each year, and by 60% in 10 years. At that time, the news made many watch fans cheer, but took the calculator to calculate, and my heart was cold. Before the adjustment, the Swiss watch tariff was 11%, but this tax rate was based on the purchase price, not the public price in the shopping mall. For example, a Hamilton self-winding mechanical women’s watch costs 7400 yuan in China. The amount of tariffs actually levied on Swiss watches accounts for more than 3% of the retail price. In other words, for a mechanical watch with a public price of 7,400 yuan, the actual tariff is only 200 to 300 yuan. In the first year, reducing the tariff by 18% is actually only a few dozen yuan cheaper; even if the final tariff is 60% off, it can only save more than 100 yuan, and the price cannot be increased during this period. In the domestic market of Hamilton, the big influence on prices is 16% value-added tax. Cosmetics and high-end watches (10,000 yuan are counted as high-end watches) still have 20 ~ 30% consumption tax. Although there is no consumption tax on clothing bags, the same reason, the actual impact of this adjustment on LVs is not great, but why adjust the price? Because this is an excellent opportunity to reduce the difference between domestic and foreign. Luxury goods are unwilling to put the price down on the table and say that there will be various speculations, such as many people will use this to spread ‘business is not good’, this brand is extremely taboo. But narrowing the spread is urgent, and too many people spend their money abroad every year. In March 2015, Chanel had the courage to cut prices in Mainland China while increasing European pricing to basically achieve the same global price (the difference should not exceed 5%). Bruno Pavovlsky, president of Chanel’s fashion department at the time, said that adjusting the spread could allow brands to focus on serving local consumers. Rather than being swarmed by purchasing agents to break the global balance. This decision was also speculation at the time, but it turned out to be very successful. ‘For a bag of more than 30,000, the difference of about one thousand can be ignored, after all, you can enjoy the service at the door.’ This is the voice of Chanel guests. At the time, LVMH executives also stated that they did not intend to follow up on this strategy and felt that it was not good for the market. However, judging from the choice of LV today, it is obviously moving closer. Hermes is also the same, although the decline is not large, for example, Picotin has been reduced from RMB 19,950 to RMB 900, and most of the bags are adjusted to several hundred to one thousand yuan. Even for the popular Kelly and platinum bags, the price adjustment will not change the relationship between supply and demand, but the attitude is indeed set. Especially at the end of last year, Hermès announced the price on the official website of the United States. The vague area is clear. It is bound to face the Chinese consumers. The difference is the pressure. In fact, many luxury goods have been adjusting the spread. According to the report of the Wealth Quality Research Institute, compared with 2011, the overall average price difference of domestic and foreign luxury goods in 2017 narrowed from 68% in 2011 to 16%, and only 18% of luxury brand spreads exceeded 20%. As a result, more people naturally began to return to China for consumption. A January report from Bain & Company mentioned that China’s luxury goods sales in 2017 were 142 billion yuan, a 20% increase from 2016, and the largest increase since 2011. Therefore, for luxury clothing brands, pricing depends more on their willingness and willingness to face the Chinese market frankly, rather than ‘I can sell more expensive if you have more money.’ Especially for a brand that is exaggerated, I might as well name it. Maxmara has maintained an amazing price difference for many years. The same domestic coat price of about 30,000 yuan, and Europe is only less than 14,000 yuan. In this pot, the tax system is really impossible to memorize. Rabbit saw some media claim that ‘LVs that have never been discounted have actually cut prices’. In fact, discounts and price reductions are not a concept. In the era of e-commerce (since LV opened online shopping, the price adjustment was as expected), the price is more transparent, and the same price worldwide is a big trend, which is convenient for brand internal management. On the one hand, reducing prices to achieve the same global price, on the other hand, shrinking discounts and maintaining the image of luxury goods is the smart way. The reborn Gucci did a good job. Before, it was 50% off the inventory (the rabbits lined up to experience it, but they were still wondering, what to do after selling 50% off). Since the new creative director Alessandro Michele took over, it has been very popular. All new products launched later are sold at full prices, and discount stores can only sell out-of-season products for one year or more. Chanel also launched a new policy from June this year. This season’s products cannot enter the subsequent discount sales, and can only sell the old models one year ago (even then, I only find single-digit discount products in the store). The advantage is that some VIPs who buy new products at regular prices will not feel lost, and the fluke of waiting for discounts will not work. Buy at regular price). I remembered that once, I took a picture of a queue in front of a discount store in Shanghai and sent it to the person in charge of the brand. If you have the confidence, don’t discount it, but the ones who really survive it are big coffees. In fact, each time the Chinese tax policy changes and releases its guiding significance far more than the literal effect, luxury goods quickly understand their intentions and use their actions to show their attitudes. In the end, a small prediction, there will be brands to follow up the price cuts, you may wish to wait and see. However, don’t expect Swiss watches, this time the price adjustment is really nothing. The gossip rabbit is only original, welcome to repost!