In “Chinese Whispers”, we share the biggest news stories about the luxury industry in China that haven’t yet made it into the English language.
In this week’s edition, we discuss:
- Hermès CEO on the ongoing trade disputes between the United States and China,
- Pandora lowers retail prices in mainland China by 15 percent, and
- Alibaba Tmall's European roadshows.
1. CEO of Hermès said trade war won't have an immediate impact - No Fashion#
The trade war between the world's two biggest economies will not cause an immediate impact on the business of French luxury powerhouse Hermès, the brand's CEO Axel Dumas told financial analysts during a post-earnings conference call on July 20. However, Dumas indicated the company would closely monitor the development of China's real estate and stock markets, which could significantly affect the assets of Hermès' Chinese customers.
The luxury brand reported a 12 percent growth in sales for the second quarter of this year.
Background#
Since U.S. tariffs on 34 billion of Chinese goods went into effect July 6, the trade war between the world’s biggest economies has kicked into high gear. For the global luxury market, the potential impact is unpredictable. Jewelry makers like Tiffany are seen to be benefiting from the changes, while luxury auto brands such as Tesla, BMW, and Mercedez Benz are facing new difficulties in the Chinese market.
2. Danish accessory brand Pandora cut prices in China by 15 percent - Jiemian#
This week Pandora announced it will be cutting prices in mainland China by approximately 15 percent from July 19. The cuts apply to a wide range of items including bracelets, rings, and necklaces, as reported by Chinese media outlet Jiemian.
The article states that Pandora's pricing adjustment aims to narrow the price gap between the mainland China and overseas markets.
Background#
A slew of luxury brands have lowered their prices in the Chinese market this month, owing to government cuts on import taxes. These brands include fashion powerhouses Louis Vuitton, Gucci, and Burberry.
3. Alibaba looks to recruit more beauty brands on Tmall via European roadshows - luxe.co#
China's top e-commerce company Alibaba has recently rolled out a series of roadshows in Europe to enlist more beauty and skincare brands to its Tmall marketplace. Starting in Milan on July 20, Alibaba hosted a conference called "The Colors of Italian Beauty", with more than 300 brands and senior managers participating.
Background#
The beauty market in China offers huge opportunity for growth, as consumers demand high quality products. According to estimates by Euromonitor International, the size of the beauty market in China will reach 485.9 billion yuan (71.8 billion) by 2021.