Burberry How To Solve Its "Asian Troubles"?

When Hongkong's mainland tourists reduce their shopping, what can Bailey do to keep them buying Burberry at home?

Recently, Burberry announced its semi annual report in 2015.

The company as a whole performed well with a total revenue of 1 billion 423 million, an increase of 9%.

The United States, Europe, the Middle East, India and Africa have strong demand for their classic windbreaker and scarves.

However, sales of Burberry in Asia, especially in Hongkong, are not ideal, and the Group expects sales to decline further in Hongkong.

At this point, the designer of the Burberry group's new CEO Christopher Bailey took office for just a year.

Before Bailey, Burberry had been steered by Angela Ahrendts since 2006.

In 2014, Angela Ahrendts was picked up by Apple CEO Tim Cook and served as senior vice president of apple.

In May of that year, the creative director came to Burberry.

About 25% of Burberry's global sales are made by Chinese consumers.

In addition to 15% from the mainland market, about 10% come from Chinese consumption in other Burberry stores around the world.

Burberry has always regarded China as a strategic priority.

On the domestic Internet, Burberry is stepping up its efforts to promote cooperation with Baidu and Youku, and jointly promoting Taobao and Alibaba in the beauty and fragrance market.

Since Bailey took office, China's offensive has not diminished.

In 2014, the flagship store of Burberry Tmall officially opened, but the industry did not think highly of it.

Burberry adjusted the strategy of public relations company, gradually marginalized the team of Hongkong and Beijing which served Burberry for a long time, and the core work was handed over to the Shanghai team.

And opened the largest Burberry flagship store in Asia in Shanghai.

In fact, as early as November 2014, after 6 months of Bailey conversion, he published the 5 point development plan of Burberry, one of which is to attach importance to the development of Asian market, especially to the place where Chinese tourists like shopping.

Nevertheless, Burberry performance in Asia is still poor this year, and Hongkong's market revenue has declined.

How should we deal with these Burberry?

Ren Guoqiang, Roland Begg's partner and vice president of Greater China, believes that

The problem encountered in Hongkong is the whole retail business in Hongkong.

With the impact of the Chinese government's anti-corruption campaign, the number of gifts consumption in Hongkong is gradually decreasing.

And more and more popular travel abroad will also take away some people who used to travel to Hongkong only.

"Japan,

Efforts are also being made to attract Chinese tourists.

Hongkong's role as a destination for tourism shopping is gradually weakening.

Ren Guoqiang said, "originally

Sales are driven by mainland tourists, but now the mainland's business is developing further.

Burberry local stores and Outlets stores are also increasing, and the price advantage has been offset by the retail development of the mainland itself.

"The spread of Burberry is too big.

Compared with these brands such as Chanel, LV, Herm s, Burberry has discount season, Outlets stores, and now there are Tmall stores in China.

Mainland customers have no reason to buy Burberry in Hongkong. "

Ye Qizheng, editor in chief of fashion watch fashion network, said: "the way to attract mainland customers to Hongkong to buy Burberry is to adjust prices."

At the morning meeting in April 15th, the Burberry group considered or imitated Chanel to reduce the selling price of Asian products and raise the European price of the same goods in order to cope with the growing price differentials between regions.

"We have been adjusting the price of commodities according to the market," said Carol Fairweather, chief financial officer of Burberry, in a conference call on Wednesday. "As prices fluctuate, we will correspondingly increase or decrease prices."

Burberry did not perform well in Hongkong. It was not Bailey's fault, but the problem he had to face for just a year after taking office.

Is it laissez faire data in Hongkong, or is it trying to adjust?

"This is a return to innocence.

Most of the revenue in Hongkong's retail market comes from the fact that tourists are abnormal and unhealthy.

Ren Guoqiang said, "the retail industry in Hongkong also needs to think about how to further enhance the attractiveness of mainland tourists and how to further promote the consumption of Hongkong people.

The price difference and traffic convenience of both places have promoted the retail trade in Hongkong, and also overdrawn the development potential of Hongkong for many years.

It's easy to earn in the first two years.

It's time to pay the debt. "

According to the industry view, the essence of retail is local stores serving local customers, and some of them come from tourists.

Retail sales should be close to service, close to the reputation of the brand and better serve the local and business circles.