Huge lines form after Chanel cuts prices in China

Due to the flailing euro, which has plunged 24% against the dollar over the past 12 months, European luxury brands are taking note and Chanel has announced that it will be adjusting its worldwide prices accordingly. And in China, Chanel has already been cutting prices, and seeing frenzied fanfare as a response with lines streaming out of Chanel stores. China’s craze with luxury products coupled with the news of lower prices inevitably enticed shoppers, with even more people paying a visit to Chanel. With over 40 people in line at a time, some didn’t even make it inside, being turned away by store employees because items were already sold out.

The weakening euro has widened the price gap for Chanel items to an all-time high, especially for products sold in China which have seen significant price increases in recent years. The price gap has resulted in some products in China costing 70% more than in Europe, prompting Chinese consumers to buy abroad instead. The price adjustments will help keep locals shopping in their home stores instead of traveling aboard, where unadjusted prices for a high-price luxury item could technically pay for your trip abroad. This will help the brands manage inventory, and Chanel’s move may see more luxury brands follow suit with lowering prices internationally.

Chanel’s price adjustments will roll out elsewhere beginning April 8.

Burberry’s oriental strategy goes awry, gets roundly mocked by Chinese netizens

1

RocketNews 24:

Burberry, one of the most famous luxury brands in the world, recently caused havoc on Chinese internet with their new product – a scarf with the Chinese character for prosperity (福) embroidered on it. This character is often used in Chinese New Year decorations and is seen as a sign of good luck. Clearly Burberry thought that if they threw the character on a scarf, it would sell millions of them China.

As it turned out, the Chinese positively hated it…

When one Weibo user came across Burberry’s New Year’s scarf and shared images of it on the social network, the post garnered nearly 15,000 shares in just five days, with nearly 4,000 comments, almost all of which were negative. The scarf is made from wool and printed with the signature Burberry pattern. On the company’s website, the product is described to “celebrate the joys of Chinese New Year and the prosperity of the Year of the Goat”. At a pricey 5,750 RMB (US$919), the scarf comes in three colors: stone, charcoal and camel.

3

However, netizens were completely unimpressed by this gesture. One commented that the scarf looked like “it costs 35 RMB (US$5.60)”. Another complained that even his colleague’s mother wouldn’t buy something so unfashionable.

2

Burberry definitely miscalculated their strategies this time. According to critics, Chinese consumers actually harbor a strong dislike for anything ‘Made in China’ so they would rather buy American or European brands. The Chinese character on the Burberry scarf had the opposite effect – it made the product look like a cheap knock-off.