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China: the new battlefield for luxury brands

China: the new battlefield for luxury brands. Leo. Contents. 1. Bicester Village’s success. 2. Why do so many Chinese keen to buy luxury goods overseas?. 3. Luxury brands are arriving at the Chinese market. 1. Bicester Village’s success. All for Chinese consumers!.

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China: the new battlefield for luxury brands

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  1. China: the new battlefield for luxury brands Leo

  2. Contents 1. Bicester Village’s success 2. Why do so many Chinese keen to buy luxury goods overseas? 3. Luxury brands are arriving at the Chinese market

  3. 1. Bicester Village’s success

  4. All for Chinese consumers!

  5. Celebrating for Chinese new year!

  6. Chinese are shopping in London

  7. 2. Why do so many Chinese keen to buy luxury goods overseas?

  8. Example • Price:100 pounds • 1 pound = 10 yuan RMB • Import tariff rate 15% • Value added tax rate 17% • Consumption tax rate 30%

  9. Example • CIF price: 100 x 10 = 1000 RMB • Tariff: RMB 1000 x 15% = 150 RMB • Value added tax: • (1000 RMB + 150 RMB) x 17% = 196 RMB (rounded) • Consumption tax: • [(1000 RMB + 150 RMB) ÷ (1-30%)] x 30% = 493 RMB (rounded)

  10. Example • After-tax price: • 1000 RMB+ 150 RMB+ 196 RMB+ 493 RMB =1839 RMB • Final price: After-tax price + Transport fee + Profit of importer+-------- > 2000 RMB

  11. Example CIF price After-tax Final price RMB 1000 RMB 1839 RMB 2000

  12. Chinese luxury consumption groups wealthy consumers young white-collar

  13. The main reason is the difference of consumption concept

  14. 3. Luxury brands are arriving at the Chinese market

  15. In 2013, An outlet village will be opened in Suzhou

  16. Suzhou village

  17. Thank you!

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