Louis Vuitton (LV) firm has been viewed as a price setter by the luxury industry for a long time now. Other companies usually follow its lead in setting their prices. The prices at Louis Vuitton have seen a 6% hike last year after being flat for almost four years, according to Credit Suisse.
Deloitte’s BenchMarque tool has seen a 4% price hike in China by LV. The cost of these products has also risen in UK and Japan over the last year. Other brands like Chanel and Bottega Veneta seem to be following suit in China. ‘Aggressive’ price hike is on the charts for all key markets in 2020 according to Credit Suisse.
With the Euro growing weaker the manufacturing costs are rising. Other factors like the cost of raw materials, logistics, taxes, and duties around the world, along with foreign exchange rates (FX) play an important role in deciding on the prices of luxury goods. A steady growth for the luxury industry is predicted even in 2020. Price hikes may also be decided on by brands who want to portray themselves as premium like Burberry. Burberry had hiked the prices by 10% in the past year across the UK. Some brands have hiked the prices to align prices in the West and China, as China is the biggest key player in the growing luxury market. LV had announced savings for customers after the Chinese government reduced a cut on VAT in April. That helped LV to align the prices in China and the US as the LV Speedy bag now costs only 12% more than in the US.
Instead of hiking the prices, many brands opted to change the pricing structure over the last few years. Brands like LV introduced high-end products like the Louis Vuitton trunk which retails for £140,000 along with less expensive products like phone cases costing £200 for consumers as per Sarah Willersdorf, managing Director at Boston Consulting Group.
Tags : Louis Vuitton (LV), luxury, UK , Japan, Chanel, Bottega Veneta,