At the beginning of the year, when most people just came back from the Spring Festival to resume work, the news of LV price increase came, in recent years, the major luxury brands can be said to be you singing and I appeared, the news of price increases came and went, how should we view LV's price increase trend at the beginning of the year? What is the purpose of LV?
1. Will LV increase prices at the beginning of the year?
According to the China ** newspaper, it is reported that Louis Vuitton has raised the prices of some products in the Chinese market, with an average increase of about 6%.
LV's official customer service staff told reporters that at present, some LV products have indeed been adjusted, and both online and offline are updated simultaneously. After the update carryall medium handbag from 2050,000 yuan rose to 2150,000 yuan. Other categories of products also have different degrees of **, which are subject to the official selling price.
The increase in the amount of the Boulogne handbag is only 900 yuan. Louis Vuitton officially shows that the Boulogne handbag will cost 1 after the update940,000 yuan, compared to 1850,000 yuan.
In September 2023, Louis Vuitton will raise some products** in the Chinese market from the 19th, with a range of between 3% and 13%, of which the Speedy20 will be increased from the original 1610,000 rose to 1830,000 yuan.
Stretching the timeline again, Louis Vuitton had a price increase in June 2023. According to the "Daily Economic News", LV's price increase involves all categories, but not all products have been raised, with an average price increase of about 1,000 yuan, and a maximum price increase of about 2,000 yuan. Kunpeng Project
2. What does the LV boss who has just sat on the throne of the richest man in the world want to do?
Every price adjustment of luxury brands touches the nerves of countless consumers. As a leader among luxury brands, LV's announcement of a price increase at the beginning of the Lunar New Year has undoubtedly aroused widespread attention in the industry again. Especially when this decision comes from Bernard Arnault, the head of LV who has just secured the throne of the world's richest man, the strategic intentions and possible risks behind it are worth going deeper.
First, in recent years, there has been a significant trend in the global luxury market – where luxury brands periodically raise their merchandise**. There are multiple reasons behind this phenomenon: on the one hand, high-end brands consolidate their brand image by maintaining the scarcity and exclusivity of their products, and *** is one of the effective means to achieve this goal; On the other hand, rising raw material costs, increased labor costs, and the pursuit of sustainable production standards will all drive up manufacturing costs; In addition, with global economic fluctuations and currency exchange rate changes, brands need to adjust their pricing to maintain balance in the international market.
For a leading luxury brand like LV, it is not surprising that it chose to raise prices in such a context. As the flagship brand of the LVMH Group, LV's decision-makers are well versed in market dynamics and consumer behavior, and have strong pricing power on a global scale. Announcing price increases at the beginning of the year is usually a strategic arrangement based on the expectation of strong market demand and stable consumer purchasing power.
Secondly, China, as one of the world's largest luxury consumer markets, plays a pivotal role in the strategic layout of LV. LV's decision to raise prices in the Chinese market reflects confidence in the purchasing power and brand loyalty of Chinese consumers. On the one hand, the huge base of middle-class and wealthy groups makes it possible to have a large number of potential customers even if there is a certain degree of high-quality products, who have a stable consumer demand for luxury goods, and have high requirements for quality and service, and are relatively less sensitive to the world. On the other hand, considering the continuous growth of China's economy and the upgrading of consumption, LV can further improve profit margins and ensure a competitive advantage on a global scale through price increases.
Third, however, the shopping habits and value orientation of Chinese consumers are undergoing profound changes. With the upgrading of consumption, the level of consumer education has improved, information access has become more convenient, and the attention to the cost performance of goods has been increasing. In this case, the continuous price increase of LV may meet with market resistance. The younger generation and some rational consumers begin to question the real value behind the high price**, especially when the *** is not proportional to the quality of the product itself or the design innovation, there may be consumer resistance, or even turn to other more cost-effective brands.
Fourth, although luxury goods have the characteristics of resisting declines and rising prices, moderate price increases can effectively increase the profits of brands, but this is moderate. Once the price increase exceeds the acceptable range of consumers, or exceeds the reasonable support of brand value, it is likely to trigger a backlash in the market. For LV, price increases need to find a balance between maintaining brand image, maintaining market share, and boosting profits. Excessive price increases may cause consumers to switch to other competing brands or purchase less frequently, which can affect the long-term growth of the brand.