#记录我的2024#近年来, the news of Chinese consumers buying luxury goods on a large scale is actually a commonplace thing, but just recently the news that Chinese consumers are buying LV, when most people think this is a regular news, a detail in it has sparked heated discussions in the market, that is, the place of consumption is not Chinese mainland, not even Hong Kong and Macao, but in Japan, what is going on?
1. Chinese consumers buy LV?
LVMH's organic revenue rose 3% to €20.7 billion in the first quarter, led by Chinese consumers, according to donews. "Global Chinese buyers' demand for LVMH fashion and leather goods has increased by about 10 percent," said CFO Jean-Jacques Guiony. However, a significant proportion of this consumption remains in Japan. In the first three months of the year, LVMH's share of sales in Japan increased from 7% to 9%, while the rest of the regions were either largely unchanged or decreasing. Management said the increase in sales in Japan was due to the contribution of Chinese tourists to Japan.
As of April 16, the number of domestic passenger flights to and from Japan has recovered to more than 70% of the same period in 2019, with an average of 246 round-trip flights per day in the past week. However, LVMH said it doesn't care much about where Chinese consumers buy their bags. "Whether it's in China, the rest of Asia, or outside of Asia, as long as we have business, we don't care too much about the location," the CFO said. ”
2. Why do Chinese consumers snap up LV in Japan?
With the advancement of globalization and the rapid development of China's economy, the purchasing power of Chinese consumers has increased significantly, especially in the field of luxury goods. However, despite the growing demand for high-end brands in the domestic market, many Chinese consumers are choosing to buy luxury goods abroad, especially in Japan?
First of all, China's luxury market has indeed experienced rapid growth in recent years. With the growth of China's economy and the growth of the middle class, more and more consumers have begun to pursue high-quality lifestyles, and luxury goods have become a symbol of their identity and social status. However, despite the rapid growth in demand in the Chinese market, the prices of luxury goods in China are generally higher than those in the international market due to tax policies, import tariffs and operating costs. These additional costs result in a significant price difference between the same product at home and abroad. In order to enjoy lower prices, many Chinese consumers choose to travel and shop abroad, especially in Europe, the United States, Hong Kong and other places, which often offer more attractive prices and more brand choices.
Secondly, the change in the yen exchange rate has also provided favorable conditions for Chinese consumers to buy luxury goods in Japan. In recent years, the yen's exchange rate has continued to depreciate, making Japanese goods cheaper than Chinese consumers. Especially during certain periods, such as when the yen exchange rate falls below an important threshold, Chinese consumers are even more enthusiastic about buying luxury goods in Japan. This exchange rate advantage not only reduces the actual cost of paying for goods, but also further stimulates the desire of Chinese consumers to buy. In particular, on April 10, the yen briefly fell below 153.24 yen per dollar, reaching a 34-year low. This change means that Japanese goods and services are cheaper for consumers who hold other currencies. For RMB holders, this means a further reduction in the cost of buying luxury goods in Japan, as the same RMB is able to be exchanged for more yen, increasing the attractiveness of buying luxury goods in Japan.
Third, in addition to the consumption attributes, luxury goods also have a certain financial investment value. In China, the second-hand luxury market is very active, and many people see the high-end brands they buy as an investment that preserves or even increases their value. For example, limited editions or classic luxury items often fetch a good price on the second-hand market, so they are purchased not only for personal use, but also for future resale potential. Buying authentic luxury goods in Japan not only allows you to enjoy a lower purchase price, but also the opportunity to receive better maintenance services and after-sales guarantees, which is an added advantage for consumers who want to hold on for a long time.
Fourth, the arbitrage theory in economics is also reflected in this behavior. As long as there is enough room for arbitrage, both capital and consumers will seek opportunities to maximize returns. The process by which Chinese consumers buy luxury goods overseas and bring them back to China for sale or use is effectively taking advantage of price differences between different markets for arbitrage. This kind of cross-border shopping can not only save costs, but also form a chain of interests from procurement to distribution with the help of cross-border e-commerce platforms, purchasing services, etc.