More and more foreign luxury brands are starting to make price adjustments of their products in China to compete for market share, as the new consumption trend of buying these goods online or during oversea trips continues to grow.
It is common practice for luxury brands to set prices higher in less developed countries, in order to make them more attractive to the rich people there. This strategy was a success in China, but it is failing because increasingly more Chinese travel overseas and purchase luxury goods overseas. Chanel's move means it is paying more attention to the market in China.
Luxury retailers are feeling a sting in the Chinese market and for the first time, a negative trend of sales growth has left many luxury brands no choice but to drop prices.
It can therefore be said that this price adjustment is just a beginning. More international companies with world-class brands will began to re-fix their price in order to meet the trend.