Following the post-pandemic boom years, there has been a decrease in demand for luxury goods globally, prompting Chanel to raise the pricing of its high-end products in China in September.
According to a representative for the luxury brand, the firm also increased costs in Taiwan, Thailand, Malaysia, Australia, and Japan, blaming changes in exchange rates. Prices have increased by 6 to 8 percent overall.
The official stated in an email that “this is something we regularly do, in line with our commitments made in terms of price harmonisation.” A traditional medium-sized flap bag presently costs 80,500 yuan ($11,030) in China and €9,700 ($10,230) in France.
Known for having considerable pricing power, exclusive luxury brands can implement hikes without necessarily losing customers. However, there have been more indications over the past year that so-called aspirational customers who purchase entry-level products have reduced their expenditure.
According to Chanel’s Chief Financial Officer Philippe Blondiaux, the brand assesses the cost of its handbags twice a year, in March and September. He continued that Chanel also raises prices in response to rise in input costs.
A post-pandemic economic downturn and a declining youth employment market have shaken China’s economy and consumer confidence, putting pressure on the shares of luxury companies like Cartier owner Richemont and LVMH Moet Hennessy Louis Vuitton SE. On October 10, the parent company of Christian Dior will be the first luxury business to release third-quarter sales figures.
