‎Bloomberg BusinessWeek/Europe’s Biggest Luxury Brands Are Nervous About China

Europe’s Biggest Luxury Brands Are Nervous About China
‎Bloomberg BusinessWeek

October‎ ‎18‎, ‎2018
Carol Matlack, Rachel Chang and Allen Wan

 

European luxury brands earned upto 30-40 percent of their revenue from Chinese shoppers. Chinese customers love to buy luxuries in Europe as 60 to 80 percent higher prices are charged on products in China mainland compared to European cities, like Paris. However, there are less incentives for them to keep purchasing luxuries in Europe. One is tightened Chinese custom office and the other is narrowed price gap between continents. In October, Chinese official started to open travellers' baggaes at the airport so the overseas buyers now have to pay tax. In addition, the European brands now narrow the price difference. There is one more hurdle to clear; trade war between China and the U.S. The brands must prepare possible tariff changes.