The era of purchasing prosperity that once had a monthly income of 100,000 will officially end early next year.

 

Since the first e-commerce law of the People's Republic of China on August 31, the company announced that it will be officially implemented on January 1, 2019, the purchase will be self-defeating. Then an article "Shanghai Pudong Airport T2 flights to find more than 100 purchases" article to explode friends circle, let the public fermentation again.

 

The new regulations not only stipulate that natural persons, personal purchases and micro-businesses who engage in goods and service business activities by means of WeChat friends circle, live broadcast, etc. are all attributed to e-commerce operators, and must obtain relevant administrative licenses for industrial and commercial registration in accordance with the law, and pay taxes according to law, and also clarify Individuals engaged in small-value trading activities, although there is no need to apply for registration of market entities, but the part of more than 5,000 yuan also needs to be declared and taxed according to law, otherwise it will be imposed a fine ranging from 20,000 to 500,000 yuan.

 

In addition, if the non-tax-free release items together with the port-inbound duty-free shops have a total purchase of more than 8,000 yuan, they still need to declare. This means that not only is the purchase, ordinary tourists will return to the country to help their relatives and friends to purchase or bring gifts in the future, even if they are purchased in duty-free shops, the tax will still be taxed according to the law.

 

In fact, since the beginning of 2017, Shanghai Pudong Airport Customs has started to check the baggage of passengers on the inbound flight. If you carry too much luxury goods or the same cosmetics, you need to pay the taxes. It seems that you are preparing for the rectification of the purchasing industry.

 

Some analysts believe that China's e-commerce industry has flourished in the past two decades, but it has come with industry chaos, fake goods, personal information leakage, tax evasion and tax evasion. The purpose of the "Electric Business Law" is to regulate the e-commerce industry that has always lacked supervision.

 

According to data released by the E-Commerce Research Center, China's cross-border import e-commerce transactions in the first half of 2018 increased by 19.4% year-on-year to 1.03 trillion yuan, and it is expected to reach 1.9 trillion yuan in 2018. On these trading platforms, many sellers are individuals or small purchasers.

 

Luxury goods and cosmetics are the main categories of purchasing. Due to the long-term differences in prices and styles between the mainland and overseas, many Chinese consumers are accustomed to seeking overseas purchasing. The purchasers use the price difference to obtain profits, in order to save costs. They usually avoid switching taxes through various channels, and it is most common to use tax-free methods for self-use products without reporting.

 

With the rising purchasing power of Chinese consumers and the strong interest in luxury goods, the luxury goods purchasing industry has grown. According to a report from Bain, in 2014 alone, the luxury goods purchasing industry was between RMB 55 billion and RMB 75 billion, almost half of the sales of luxury brands in mainland China. This huge grey market has caused the country to lose a huge amount of tax revenue every year.

 

In the long run, combating purchasing is a good news for the brand. The reduction in purchasing is conducive to the brand to increase direct contact with consumers, enhance the emotional connection between brands and customers to foster loyal customers. In addition, executives who continue to have luxury brands complain that many purchases are often used to sell high-margin goods and fake goods, which makes the quality of the fake goods indirectly damage the image of the brand.

 

Jean-Jacques Guiony, chief financial officer of LVMH Group, has previously commented that they do not encourage purchasing behavior and limit this situation as much as possible. Chanel stores in London and Paris will also impose restrictions on popular items. For example, each customer can only buy two bags at the same time.

 

In recent years, many overseas Chinese and international students have started to expand their business due to the purchase of dividends. Their purchasing power has often affected the normal inventory turnover of the brand, which has led many brands to introduce various purchase restrictions, including FANCL. High-end Japanese beauty brands such as Shiseido and Gossip's Albion also frequently issue purchase restrictions to curb the purchase of cockroaches.

 

However, with the rise of the purchasing industry and the rise of large-scale cross-border e-commerce platforms such as Netease Koala, the profit margin of the purchasing market has become increasingly narrow. Domestic luxury platforms such as Tmall Luxury Pavilion, Jingdong Toplife and Temple Library are constantly optimizing the buying experience, providing a more convenient channel for Chinese consumers to purchase luxury goods online. Since these online channels are flagship stores directly opened by luxury brands, the supply is guaranteed.

 

Last year, Jingdong invested in British e-commerce Farfetch. Last Friday, Richemont Group just entered into a strategic cooperation with Alibaba. Its world's largest e-commerce platform Yoox Net-a-porter entered the Luxury Pavilion of Tmall luxury exclusive platform. The endorsement of brand resources of foreign e-commerce also enhances the trust of consumers in the domestic e-commerce platform. Therefore, the strangulation of these "regular army" has made the purchasing business, which has been questioned by authenticity, worse.

 

In addition, the reduction in tariffs has narrowed the domestic and international spreads and is bringing Chinese consumers back to China. In 2015, Chanel had extremely rare price cuts in the Chinese market. At that time, Chanel became the first luxury brand to adopt price reduction measures due to China's foreign exchange and tariff gap. In the overseas market, the price increase, but the price cut in the Chinese market by 20%, adopting the global market price strategy, so that a price cut frenzy sweeping the entire Chinese luxury goods industry will be opened.

 

At that time, the Chinese luxury goods market was still out of the cold winter. The purpose of this move was to narrow the price difference between the Chinese market and other regions, boost sales in the Chinese market, and crack down on purchasing. According to statistics, although Chinese consumers contribute one-third of the global luxury goods sales, only one-fifth of the transactions actually take place in mainland China. The rest of the transactions occur overseas, including ordering from overseas websites. Chinese travel shopping or transactions generated through overseas purchasing.

 

In the parallel market, the purchase of the domestic physical store performance of the violently squeezed luxury brands, through the price increase abroad, Chanel is now one of the lowest luxury brands. Chanel Fashion President Bruno Pavlovsky said in an interview with Reuters that the brand has succeeded in curbing the turnover of the gray purchasing market.

 

According to the data of the fashion business news, the overall average price difference between luxury goods at home and abroad in 2017 has been reduced from 68% in 2011 to 16%, and the price advantage of purchasing will no longer exist. Under such circumstances, the "profiteering era" of small shoppers will end.

 

However, the Chinese market will encounter some resistance to completely get rid of the purchasing phenomenon.

 

For Chinese consumers who are still price-sensitive, as long as their demand for luxury goods exists, the purchase will still exist for a while. In addition, from the perspective of consumer psychology, many consumers seek to purchase not only because of price advantage, but also because they think that luxury goods purchased abroad are “better”. In recent years, some news about the luxury store clerk changing the prince and replacing the real goods in the store with fakes for consumers has caused some consumers to doubt the authenticity of the Chinese flagship store products. Coupled with the inherent impression of the domestic luxury clerk's attitude and poor service experience, Chinese consumers are more willing to find acquaintances to purchase.

 

It is worth noting that in addition to first- and second-tier cities, most cities in China still do not have major luxury brand stores, nor do they open online shopping channels. If there are no more travel opportunities, people living in these cities still have to use purchasing. Although various brands have been striving to change their strategies to expand online in recent years, it will take time for consumers who are dependent on purchasing to change their spending habits.

 

It is worth noting that Chanel announced the third price increase last week. However, every time Chanel announces the price increase, it will continue to trigger the purchase of the opportunity, which may be contrary to Chanel's intention to crack down on the gray market, and the relationship between luxury brands and purchasing has entered a delicate stage.

 

At the beginning of this month, after the domestic crackdown on purchasing news, the share prices of parent companies such as Louis Vuitton and Gucci fell sharply, and the market value once evaporated 200 billion yuan. The news has intensified the nervousness of the giants. Some people in the industry said that although the Chinese luxury goods market still has great growth potential, the complex retail environment and the punitive tariffs in the United States may slow down the luxury purchasing power of Chinese consumers. Analysts are reassessing luxury stocks and believe the industry is in crisis.

 

Some analysts said that luxury brands are not worried about the economic slowdown. Considering the expansion of the middle class, the level of personal expenses is not bad. They are worried about purchasing, because purchasing has disrupted the supply and pricing mechanism of luxury brands, but how to smooth The "valve" of adjusting the spread is not an easy task, especially in the Chinese market, where luxury brands are increasingly dependent, and any turmoil will have an adverse impact.

 

In the short term, purchasing may bring pain to luxury brands, but the luxury attributes of these brands can be better protected.