With the lowering of the customs duties desired by the government, the fashion world is responding with price cuts and with a new retail policy
Price cutting and a renewed policy of openings. The third Chinese revolution in fashion, coinciding with the abatement of duties that took place last July, is starting to take shape with the aim of bringing to China all the volume of purchases that the Chinese made abroad. And if the decision is political, the reaction is entrepreneurial.
The first operation, which will also be the most striking one and probably the one destined to create a precedent followed by many others, bears the signature of four giants of the fashion world: Louis Vuitton, Gucci, Burberry and Hermès. All four labels, at the turn of the middle of July, announced a price adjustment ranging between -3% and -5% depending on the product categories. Reductions that added to those of customs values, from 17.5% to 8% for clothing and from 24% to 10% for footwear and leather goods, mark a decisive push towards the courtship of the Chinese in China.
On the other hand, the volume of business moved by the inhabitants of the former Celestial empire is the most important in the world, because of the 276/281 billion euro expected in 2018 related to the sale of luxury personal goods announced by the estimates of Altagamma, 88 / EUR 90 billion are Chinese, but only 22 / 22.5 billion euros are made on the Beijing-Shanghai axis.
On the one hand, that of the government led by Xi Jinping, means looking at a future made up of more revenue (vat), more jobs (shops and distribution), a renewed dynamism of the real estate market (rents) and, lastly, a close to illegal imports. On the other hand, that of international fashion houses, means increasing the ability to intercept new customers, that is, all those who do not travel, realign the performance of boutiques, not always positive, and lastly, to protect themselves from the fluctuation of rates currency exchange rate.
The most interesting aspect, however, because it must lead to a not yet quantified international rebalancing, is that of the windows, which before, at the beginning of the millennium, have gone through a phase of bulimic openings, then, today, of great closures: 62 between July 2016 and 2017 according to a research produced by Bernestein with Burberry, Saint Laurent and Céline protagonists. Moschino instead, the accelerated chose to give it on the internet with the help of Alibaba.
Then there are the new entries, because especially now, the Chinese market can no longer be ignored.
So here from the United States, despite the political bickering between the two nations, which paradoxically affect the duties, Brooks Brothers landed with a point of sale in Shanghai, while safe from any controversy, given the headquarters in Toronto, Canada Goose has chose Beijing and Hong Kong.
So the future of fashion-retail seems to have taken a very specific direction and the impacts, in economic terms, should not be violent.
Also because in European flagships there are often exclusive assortments and shopping tourism, which for the World tourist organization of ONU is worth 35% of the total, will continue to give satisfaction, at least until the shop experience will be a key component.