Chinese customers queueing up for a luxury brand at a shopping mall in Shanghai on Sunday. Photo: Chen Xia/GT
Multiple luxury brands have raised or are planning to lift product prices amid global economic headwinds. Customers have noticed that some popular handbags from French luxury brand Chanel have recently gone up by 4,000 yuan ($546.56), and jewelry brand Tiffany is also set to raise prices from Friday.
The Global Times learnt about the Tiffany price rise on Thursday, with staff saying that the price of diamond ring products will increase from Friday. No reason was given and the scale of the price rise was not disclosed, but media reports said prices of Tiffany products globally will rise by 20 to 59 percent.
On Chinese social media platform Xiaohongshu, multiple users noticed the prices of Chanel bags have been lifted since November 2. The official website of Chanel shows the current price of the Large 2.55 handbag is 75,500 yuan, while the price in November 2021 was 71,500 yuan, according to a post from a user named “Yanbao Yanbao.”
Zhang Yi, CEO of iiMedia Research Institute, told the Global Times on Thursday that luxury brands are raising prices to offset losses from uncertainties in the global economy and to maintain stable profits.
Luxury groups including Kering, Hermès and LVMH showed strong results in their recently released third quarter financial reports.
Kering Group, which owns Gucci, Yves Saint Laurent and Bottega Veneta, saw its revenue rise 23 percent year-on-year to 5.14 billion euros ($5.01 billion) in the third quarter of 2022. For LVMH, income from January to September 2022 reached 56.5 billion euros, up 28 percent year-on-year.
Hermès recorded revenue of 8.6 billion euros by the end of September 2022, up 30 percent year-on-year, and sales in China picked up strongly despite the closure of outlets due to COVID-19.
A representative from Hermès said prices would rise by 5 to 10 percent in 2023 due to rising costs and currency fluctuations, while noting that demand remained strong, Reuters reported.
“The buying power of luxury consumers is always reliable, so brands can use this to raise prices and maintain profits,” said Zhang. But analysts also warned the strategy could harm the brands if it is overused.
