The price war would have been unthinkable just a few years ago for labels whose growth stems from an image of exclusivity and products that keep their value. HONG KONG - Some luxury labels are discounting their products to an unprecedented degree in China, reflecting a growing panic over unsold inventory as local consumers pull back on spending. Starting this month, Chinese shoppers can snap up a small beige, crocodile-patterned version of Balenciaga’s iconic Hourglass handbag for US$1,947 (S$2,630), or 35 per cent off on the mainland’s dominant e-commerce platform, Alibaba Group Holding’s Tmall.
That price is cheaper than what’s listed on the brand’s official websites globally and major luxury platforms including Farfetch. Balenciaga - part of French luxury giant Kering - averaged a 40 per cent discount on sale items in three of the first four months of 2024, according to people familiar with the matter, who asked not to be identified discussing private data. The brand has also more than doubled its number of discounted products on Tmall, accounting for more than 10 per cent of its inventory on the platform from January to April, the people said.
During the same period last year, Balenciaga only discounted items in January, and at an average of roughly 30 per cent, according to the people. It had no markdowns at all in the first four months of 2022, they said. A similar trend can be seen for other labels.
Capri Holdings’ Versace, LVMH’s Givenchy and Burberry Gr.
