Shoppers who think the prices of luxury goods in the Chinese mainland market are already too high should prepare themselves for a shock.
Sellers of many luxury brands are jacking up the prices of their products in what is likely to be only the first round of such increases in 2013.
Retail analysts said foreign sellers are trying to make up for a decrease in china in other markets, especially Europe, by trying to take advantage of the current strong demand in the Chinese mainland for luxury items.
Benefit Cosmetics, a cosmetics manufacturer, was the first to start the trend, raising the prices of its popular products on Dec 29.
Various beauty products sold under the SK-II brand soon followed. The brand’s essence lotion, for instance, became 4.7 percent more expensive. Meanwhile, luxury goods companies including Christian Dior SA and Chanel SA are also known to be preparing to raise their prices.
Chanel China later said the prices of some of its products sold on the Chinese mainland will be raised on Tuesday or Wednesday, saying there will be “a slight increase of up to 10 yuan ($1.60) for only a few products”.
“The price adjustment this time is based on regular checks of our products,” a Chanel China spokesman said. “It is also a result of rising labor costs, raw materials and operating costs combined with exchange rate fluctuations.”
The official explanation of why the prices of luxury products are ever increasing only scratches the surface of the real reasons. One important point to keep in mind is that sellers are trying to take advantage of the buoyant demand for luxury products that exists in the mainland market, said Zhou Ting, head of the Fortune Character Institute, a professional institute that specializes in studying how the rich live.
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