Cosmetic brands to start new price hikes
Updated: 2013-01-11 11:15
Cosmetic brands Chanel and Dior will set off a new round of price hikes of as much as 30 percent within a few days as part of its 2013 global pricing plan. Products sold in China will be affected, the National Business Daily reported on Thursday.
The 7 to 30 percent price increase in Chanel's skin care, make-up and perfume products will start from Jan 15 and Dior will increase the prices of its products by around 30 percent from Feb 1. The brands' counters in a shopping mall in Beijing confirmed the price hikes, though more detailed information remains unknown, the report said.
In late December, Benefit was the first to introduce a price hike, and last week, SK-II also made changes to 80 percent of its products sold in China.
For the cause of the price hikes, the luxury brands point to the surge in costs of raw materials and human resources, changes in exchange rates, taxation as well as inflation, but some analysts believe it is merely part of the luxury brands' pricing strategies.
"China continues to see a strong demand in luxury goods and the brands actively pick the price hike as a strategy to create the imbalance of supply and demand in this market," said Zhou Ting, director of Fortune Character Institute, a luxury market research agency.
Zhou said the current strategy adopted by luxury brands is to maximize the benefits of the brands, which is reflected by production controls and price hikes, so that the profits can be greatly expanded in the market.