Chanel Responds to Decreased Demand With Increased Prices in China — Retail Bum

With Chinese consumers cutting back on luxury purchases, Chanel is responding in an interesting way by raising the prices of its premium products.

The French luxury brand has implemented similar price increases in Taiwan, Thailand, Malaysia, Australia, and Japan, resulting in a collective increase of 6% to 8%. This adjustment is attributed to currency exchange rate fluctuations, as reported by Bloomberg.

Chanel noted that these price modifications are in accordance to its price uniformity policy, wherein the brand evaluates its prices on a semiannual basis, usually in March and September.

Despite the significant pricing influence of luxury brands, recent trends have suggested a more prudent spending attitude in the past year, particularly among aspirational consumers who acquire entry-level luxury products. Luxury conglomerate LVMH’s latest quarterly report also attested to aspirational shoppers’ continued struggle in the current economic environment.

“After three roaring years and outstanding years, growth is converging toward numbers that are more in line with historical average,” said LVMH CFO Jean-Jacques Guiony on Tuesday, October 10, 2023, adding that this behavior was part of the cycle.