The latest insights from Bernstein analysts on luxury brands’ global pricing strategies

According to the latest interpretation of Luca Solca, an analyst at investment research firm Bernstein, based on a study of the average prices of similar commodities from January 2020 to January 2021, the average price of luxury goods in mainland China is 60% to 75% higher than in Europe, while Average prices in the US are only 10% higher than in Europe.

This finding highlights the challenges and differences that luxury brands face in their global pricing strategies. Mainland China is one of the largest luxury goods markets in the world. Consumers’ demand for luxury goods continues to grow, but the prices are relatively high. In contrast, the pricing in the US market is relatively reasonable, and the price is slightly higher than that in Europe.

This pricing difference is primarily driven by several factors. First of all, there are differences in policy factors such as taxes and tariffs among different countries and regions, which will directly affect the pricing of luxury goods. Secondly, the operating costs and market strategies of luxury brands in different regions will also have an impact on pricing. In addition, consumers’ purchasing power and buying habits of luxury goods are also important factors for pricing differences.

For luxury brands, a global pricing strategy needs to balance demand and price sensitivity across different markets. They need to take into account the consumption power, competition and regional characteristics of each market, and formulate corresponding pricing strategies. This requires not only a deep understanding of consumer behavior and preferences in different markets, but also a comprehensive assessment of factors such as taxation and policy.

By more precisely formulating global pricing strategies, luxury brands can better meet the needs of different markets and achieve sales and brand growth. However, they also need to carefully evaluate the impact of pricing strategies on brand image and market competitiveness to ensure that prices match product values and provide consumers with a good shopping experience.