In September, Chanel made strategic pricing adjustments for its premium products in China, a proactive move reflecting the evolving dynamics of the global luxury goods market following the post-pandemic boom years.
These pricing adjustments also extended to key markets including Taiwan, Thailand, Malaysia, Australia, and Japan. Chanel attributed these changes to fluctuations in exchange rates, resulting in price increases ranging from 6% to 8%.
A spokesperson for the luxury brand clarified, «This is a standard practice for us, aligning with our commitment to price harmonization.» As an illustration, the classic medium-sized flap bag, now priced at 80,500 yuan in China ($11,030), can be compared to its European price of €9,700 ($10,230).
Luxury brands with exclusive appeal have historically wielded substantial pricing power, enabling them to implement increases without significant customer erosion. However, recent trends have shown that «aspirational customers» who opt for entry-level products have become more judicious with their spending in the past year.
Chanel conducts thorough reviews of its handbag prices biannually, typically in March and September. These adjustments also respond to input cost inflation, as shared by the brand’s Chief Financial Officer, Philippe Blondiaux, in a Bloomberg interview in May.
The post-pandemic economic landscape, coupled with challenges in the youth job market, has introduced economic uncertainty and impacted consumer confidence in China. Consequently, this has put pressure on the shares of luxury conglomerates such as Richemont, the parent company of Cartier, and LVMH Moët Hennessy Louis Vuitton SE. The upcoming report on third-quarter sales from Christian Dior’s parent company, scheduled for October 10, is anticipated to offer further insights into the luxury industry’s performance.
