VIP Class Notes (Tibo)

Not only the political situation influence luxury brands, but also all brands and industries.

Recently, Chinese government is planning to brace for higher luxury goods taxes. The official aim is that reduce the gap between the rich and poor. Because of the consumption tax as a part of retail price, luxury brand must increase it after that. It will influence profit of mass market. China’s luxury consumption has a great development after COVID. Consider to Chinese economic situation, the government expect to change the tax policy to drop luxury growth, with my opinion.

With the similar situation, corruption was be readjusted by president Xi Jinping before. The luxury industry faced a huge impact. In order to revive their marketing share, they had to create more multiple marketing activities and increased its frequencies and channels. That’s why you can see the luxury industry that show a good business booming at this time.

The political situation does not only influence luxury brands, it also influences all brands and industries / Not only does the political situation influence luxury brands, (but) it also influences all brands and industries

Recently, The Chinese government is planning to introduce higher luxury goods taxes / people brace for higher taxes. The official aim is to reduce the gap between the rich and poor. Because of the consumption tax is a part of retail price, luxury brands must increase it after that / luxury brands will have to raise their price . It will influence profit of the mass market. China’s luxury consumption had a great development / developed rapidly after COVID. Considering the Chinese economic situation, the government expects to change the tax policy to limit / to reduce luxury growth, in my opinion.

With a similar situation, corruption was readjusted by president Xi Jinping before / President XJP introduced measures to fight corruption and the luxury industry faced a huge impact. In order to revive their market share, they had to create more varied marketing activities and increased its frequencies and channels. That’s why you can see the luxury industry shows a good business boom at this time. / that is why the luxury industry is booming at this time.

It is also in your normal life. That is the good way to connect or socialize with your friends or your partners it still happens./ It is still common.
It is a good way to build up a good relationship with others but I think it is different with the government officials.
Most people would like to achieve some purpose and maybe the purpose is unfair. So that is why the president would like to change this situation.
I think it is different if you want to have a good relationship with others or just think it is a polite way to communicate.

For luxury brands gifting plan is an important part and they will have different seasons gifting strategies for customers.
I think the gifting plan is aimed to drive more sales to tell customers you should buy more.

from a company’s standpoint/view it should be marketing spending for their sales and I think it is also to maintain the relationship.
Sometimes brand sales also create some gifting benefits to their customers . The top clients they have their dedicated salesperson and they have tight relationship with their salesperson so sometimes they will hang out together on weekends and the salespeople maybe also have their own resources and they also would like to prepare some gifts for their best clients.

For other people why they would like to buy some luxury goods as a gift for business or relationship that is the Chinese culture. They focus on face.
They feel luxury products give you face.

China is in developing rapidly right now / is in a time of rapid growth

in the past most Chinese people were poor and there were no luxury brands so they didn’t know but now people became richer and they are trying to find their grail so it is the current situation.

I would like to say an example / give an example . Last month I had a business trip in Qingdao, It is a tier 2 city and they have a new 5 star hotel.
I checked the venue and chatted with their sales director and I realized that they didn’t have good sales. They are in the same building with another hotel / they share the building with another hotel and have the same owners but different brands and teams . The other one is crowded every weekend. / is more successful
The sales director told me because in the past this hotel was the grail for Qingdaonese but they didn’t have money so they couldn’t enjoy this hotel / afford it. But now they are richer  / they are more wealthy so they want to achieve / realize their past dream so they want to have brunch on weekend and enjoy the hotel room.

We have a lot of niche brands which tier 2 cities don’t know about / and tier 2 cities don’t know about them

so why (do) they have to spend over 10k to buy a product which they don’t know.  / they cannot justify spending over 10k on something they don’t know
Some brands need development more rapidly. / need to develop more rapidly
In my opinion for the new brands if you want to develop rapidly, opening stores in different regions is a good way but you should also consider the location for premium brands.
Their current purpose is not to expend too much so they choose the way to cooperate with third party platforms and buyer’s stores

They don’t need to spend more to open their own stores and they still have sales channels.
They can grow brand recognition more slowly  / they can grow more organically 
It depends on the brand’s strategy.

Vocabulary

buyer’s remorse (n) when you regret buying something right after buying and usually want to return or sell
A lot of people cancel their online orders because of buyer’s remorse

to justify (v) 是…的正当理由 / 为…辩解
I have to justify my spendings during a business trip to get a refund from the company

organic (adj) natural / without external push/stimuli
Many micro brands develop organically because happy customers talk about them to their friends

organic growth (n)

dedicated (adj) 献出  / personal
I have a dedicated dealer to help me get the pieces I want

government officials (n) people working for the government
Government officials have to be careful of not wearing too expensive luxury goods

varied (adj) diverse / not the same
I want to have varied meals, I don’t want to always eat the same thing

marketing (n) advertising
The marketing share of our budget is 10%

market (n) 销售地
Microsoft has 90% market share of the OS system

domestic (adj) local/national
The government wants to support domestic products

to brace for something  : prepare for something that will make your life more difficult
We have to brace for higher taxes
The company is bracing for low sales due to the covid situation …

VAT (Value added tax) 增值税
The VAT in China is XX%

mark an occasion (v) do something special to celebrate an important day / milestone
It was Tom’s 18th birthday so we opened an old bottle of wine to mark the occasion