China: the new battlefield for luxury brands Leo

Contents 1. Bicester Village’s success 2. Why do so many Chinese keen to buy luxury goods overseas? 2. Why do so many Chinese keen to buy luxury goods overseas? 3. Luxury brands are arriving at the Chinese market 3. Luxury brands are arriving at the Chinese market

1. Bicester Village’s success

All for Chinese consumers!

Celebrating for Chinese new year!

Chinese are shopping in London

2. Why do so many Chinese keen to buy luxury goods overseas?

Price:100 pounds 1 pound = 10 yuan RMB Import tariff rate 15% Value added tax rate 17% Consumption tax rate 30% Example

CIF price: 100 x 10 = 1000 RMB Tariff: RMB 1000 x 15% = 150 RMB Value added tax: (1000 RMB RMB) x 17% = 196 RMB (rounded) Consumption tax: [(1000 RMB RMB) ÷ (1-30%)] x 30% = 493 RMB (rounded) Example

After-tax price: 1000 RMB+ 150 RMB+ 196 RMB+ 493 RMB =1839 RMB Final price: After-tax price + Transport fee + Profit of importer > 2000 RMB Example

CIF price After-tax Final price RMB 1839RMB 2000RMB 1000

wealthy consumer s Chinese luxury consumption groups young white-collar

3. Luxury brands are arriving at the Chinese market

In 2013, An outlet village will be opened in Suzhou

Suzhou village