What Happened: On the heels of Hermès’ price increase at the beginning of January, brands such as Bottega Veneta and Louis Vuitton are rumored to be raising their prices on selected products. This information was shared by Chinese luxury Daigous (surrogate shoppers) on social platforms like Little Red Book and WeChat Moments.
While Bottega Veneta declined to comment on the price hike when Jing Daily reached out for confirmation, a sales associate from the brand’s boutique at Nanjing Deji Plaza confirmed that, beginning on January 8, the brand will be increasing prices on selected hero products by 3 to 10 percent. Louis Vuitton, meanwhile, denied another round of price hikes when speaking to Jing Daily.
Jing Take: Last year, luxury houses such as Chanel, Louis Vuitton, Prada, and Dior raised their prices — particularly on popular handbags — as a way of combating supply chain, manufacturing, and logistics interruptions due to COVID-19.
Yet, these markups clearly did not discourage Chinese shoppers, as long waiting lines could be found outside most luxury boutiques. Instead, many were spurred on by the rumors, choosing to purchase items on their wish lists, even though these rumors weren’t officially confirmed. But, due to ongoing travel restrictions and booming tax-free retail sales in the Mainland, local shoppers have gotten used to purchasing luxury goods domestically.
Price increases within a proper margin and frequency can, in fact, maintain brand equity and relevancy, and it is working especially well for top performers like Hermès, Chanel, and Louis Vuitton in China’s vast luxury market. Nevertheless, players always need to measure their brand desirability before implementing this strategy.
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.