link.png Shoppers flock to Hong Kong stores as Chanel drops prices← Back


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Today, reports tell of how queues formed outside the Chanel stores in Hong Kong, as the brand dropped the prices on its signature bags by almost 20%. This comes following the announcement earlier this week that the luxury label would be realigning prices globally on three of its most popular bags. This price drop in Hong Kong was the first move in a strategy which will be implemented on a global scale on 8th April.
 
So what does this mean? As a general rule prices are to go up in Europe, and drop in Asia. The Boy Bag, currently costs 3,100 euros in Europe and is set to rise to 3,420. Conversely, in China the price is to drop from ¥32,700 to ¥26,000. Prices will remain the same in the US, the UK and Japan. In a statement, Chanel explained: "This decision will enable us to offer our products to all our clients at a harmonised price wherever they are in the world." The price of luxury goods in Asia can be almost 70% more than in Europe and Chanel’s move will make it more attractive for Asian buyers to shop locally. This strategy is also an attempt to wipe out the parallel resale markets that make the most of the price differences between currencies. 

Chanel’s iconic bags in question - the 11.12 and the Boy Bag – can be seen in the new handbag campaign which was released earlier this month. However, the standardised pricing will stretch to further products over time. In addition this could potentially be the foundation for e-commerce.
 
Chanel isn’t the only brand making this move. Luxury watch label Tag Heuer has also announced plans to cut prices internationally. If other brands decide to follow suit, the global luxury market could undergo drastic change.