As consumer demand continues to rise and resale becomes an important part of the luxury market, luxury brands are trying different methods to limit the number of purchases of their popular products to promote exclusivity, the latest being Chanel .
According to fashion business news, Chanel recently updated the purchase restriction policy. From this month onwards, consumers can only buy one Classic Flap handbag or Coco Handle each year. For other small leather goods, consumers are required not to buy two identical products every year. The previous restriction cycle for 2 months.
It is worth noting that Chanel has raised the price of its popular products three times this year. From 0:00 on July 3, the price of the Classic Flap medium has increased to 56,100 yuan, approaching the 60,000-yuan mark, and the cumulative increase in the past two years has exceeded 35%. However, the series of handbags are still highly sought after by consumers, and consumers in many regions line up to buy new brands every season.
In the "Second-hand Luxury Consumption List in the First Half of 2021" released by the second-hand luxury e-commerce platform Hongblin, Chanel's Classic Flap became the most popular bag, followed by Gucci's GG Marmont and LV's Speedy, Hermes's Birkin bags and Dior's Lady Dior are fourth and fifth respectively.
Some analysts pointed out that the high increase makes Chanel classic handbags seem to be an alternative financial product, and some consumers ridiculed that Chanel classic handbags even exceeded the income increase of houses in first-tier cities. Public opinion has also begun to compare Chanel with Hermes. People think that the current price will choose to increase the price to buy Hermes. The current price of Hermes' small Lindy is 47,300 yuan, which is lower than the medium Classic Flap.
It should be noted that the price increase mechanism of luxury goods is based on brand power. The symbolic value of luxury is higher than the use value, which gives it an imaginative premium space. It is determined by intangible factors, namely emotions, desires and needs, in other words, the high premium of luxury goods is based on scarcity.
And when the crowd who can afford the benchmark products reaches a certain threshold, it is the time for luxury brands to raise prices. They constantly monitor the scarcity of brands, and the decline in scarcity directly affects the bargaining power of luxury goods in the market.
According to the 2020 annual report released by Chanel's official website, affected by the epidemic, the brand's sales fell 18% year-on-year to US$10.1 billion last year, and its operating profit also decreased by 41.4% to US$2.049 billion, underperforming the LVMH fashion leather goods department for the second consecutive year. and Hermes.
During the reporting period, the Asia-Pacific market where China is located recorded a drop of 3.1% to US$5.257 billion, making it Chanel’s largest market for the third consecutive year, accounting for 44% of total revenue, while Chanel’s sales in Europe fell sharply. 36.4% to 2.885 billion US dollars, the US market also fell 15% to 1.966 billion US dollars.
Regarding the unsatisfactory performance in 2020, Chanel Chief Financial Officer Philippe Blondiaux explained in an interview with Reuters that the decline in sales last year was related to the temporary closure of some of the brand’s stores due to the closure of the epidemic. At present, 10% of the brand’s global stores are still open. Back to normal business.
However, with the gradual recovery of the global physical retail environment, Philippe Blondiaux revealed that Chanel's revenue from January to June 2021 recorded strong double-digit growth compared with the same period in 2019. Previously, the brand expected to take two years to return to the pre-epidemic period. s level. In the Chinese market, which was the first to pick up, long queues in front of Chanel boutiques have become the norm since the second half of last year.
"Despite the difficulties of 2020, the image and values that Chanel has built up for a long time has not been affected," added Philippe Blondiaux. He expects that consumers' retaliatory shopping will continue, and Chanel's revenue will surge 35% this year to $13.635 billion.
Up to now, Chanel has not responded to the relevant news.