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Luxury Brands’ Pricing Strategy in China | Global Pricing Strategies

With the economic boom, Chinese customers are becoming one of the significant groups for luxury companies among all different kinds of area from fragrance to cars. In the next five years, with the disposable incomes of consumers rising, the demand for premium brands had grown. However, the high import taxes, unstable currency and the huge difference between the retail price in China and Europe, more than 70% Chinese choose to buy luxury brands in other countries rather than in their local boutique.

For the luxury brands, it is a challenge for them to set their retail price in China since it will significantly affect their future growth. Apparently, different luxury companies chose their own methods and regulations to the Chinese market. For example, although Louis Vuitton still raised their retail prices in China compared to Europe, CHANEL decided to narrow the range between China and Europe retail prices. The following charts describes several brands for the price differences.

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Luxury Brands’ Pricing Strategy in China – Global Pricing Strategies.