Chanel that increased its price in China by 15 percent over five years has been the first to announce that it will be reducing its price in the country by 20 percent. In the European market, Chanel is increasing its price by 20 percent, shortening the price gap to 5 percent.

 

In regards to the price gap, the customs authority has claimed many times that the tariff¹ of imported goods is only around 10 percent. Many people were dubious² about it due to the much higher price of international goods in China.

 

Chanel's price adjustment has unintentionally helped prove the argument of the customs authority that the original pricing set by cross-national companies is the reason behind the big price gap domestical and abroad.

 

It's fair to say that these companies are forced to make price adjustments to cater³ to the market trend. If people can't get reasonable prices at home here in China then they will go abroad. Furthermore, with online shopping becoming increasingly popular, the price of international luxury goods could continue to change.

 

It can therefore be said that this price adjustment is just a beginning. More international companies with world-class brands will began to re-fix their price in order to meet the trend.

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