In fact, according to media reports, since 2000, Coach put over ninety percent of the plant to the relatively low labor cost countries in Asia, the vast majority in China. And the next year, Coach’s consolidated gross profit as high as 64 percent, more than 62% of LV, then it is all the way jumped to more than seventy percent in recent years!
But why Chinese sales price but considerably more expensive than the sales price in the United States? Of course there have factors of the Chinese government’s high taxes, such as customs duties, excise duty and VAT, but to a greater extent because of the pricing in the United States. These packages produced in China, accessories imported from the United States. Finished in the domestic production, first shipped to the United States inspection, and then sell them back to China. US headquarters in pricing, will social culture, consumer habits, behavior characteristics and other factors of consumer groups in various countries, long-term in-depth investigation. They found that Chinese consumers want through the purchase and use of high-end brands of merchandise to highlight the identity, or the pursuit of well-known brand of unique products to make themselves appear more confident. Therefore, the price is low, but not the easy way out.
Consequently, we see such a result: one skilled Chinese workers labor at low prices for American brands greatly reduce the production costs, on the one hand the rapid rise of the Chinese market and its leading global highest price bring excess profits for American brands. Two factors are added, the United States brands grabbed more than 70 percent of the profits. Chinese people in the production and consumption hit “two jobs” for those foreign brands. ???