A few days ago, I went to the mall for a meal and then took a stroll around Uniqlo. I spotted a down jacket that I liked, tried it on, and then checked the price tag, which read 799 yuan. I remembered a similar style of down jacket from two years ago that was priced at 599 yuan. Since I don’t usually have a strong desire to buy clothes, this realization suddenly triggered a feeling of being taken advantage of. In an instant, it eliminated my desire to purchase the jacket, as not buying it meant saving a significant amount of money.

Turning to some hot topics, such as the price increase of down jackets leading to a shift in the market towards military coats. The selling price of domestic down jackets has reached 7000 yuan, while the average price of Bosideng has also risen to 1600 yuan. In comparison, the prices at Uniqlo don’t seem too unreasonable. At the end of last year, the vice president of Bosideng stated that the group’s overall average price had already risen to 1600 yuan, and confidently predicted that the average price would increase to 2000 yuan in the next 3 years, with the main selling prices ranging from 1500 yuan to 1800 yuan. Of course, Bosideng is positioned as high-end with strong brand strength. Meanwhile, well-established sports brands like Li-Ning and Anta are also not far behind, expanding their high-end product lines priced above a thousand yuan.

When entering the market or browsing online self-operated stores, one can notice that the prices of down jackets are indeed fluctuating. According to data from the China National Commercial Information Center, from 2014 to 2020, the average unit price of down jackets in China has increased from 452 yuan to 656 yuan. The transaction price of large brands’ down jackets has even exceeded 1000 yuan, with products priced above 2000 yuan accounting for nearly 70%. It seems that the trend among young people this year to wear military coats and floral cotton-padded jackets is not only for uniqueness but also heavily relies on the matching of down jackets.

Why have down jacket prices risen? The common explanation is cost pressure. The increase in raw material prices is one of the main reasons, as duck down and goose down account for about 45% of the total cost of down jackets. From 2016 to November 2022, the price of white duck down has risen from around 200 yuan per kilogram to about 360 yuan, an increase of 80%; the price of white goose down has also increased from less than 400 yuan per kilogram to about 640 yuan, a 60% increase. The rise in costs, coupled with the introduction of new national standards, has led to an increase in procurement prices. Consumers are more inclined to purchase goose down products, which is also one of the reasons for the general increase in down jacket prices.

However, in the end, these reasons do not actually hold water; it seems like they just want to sell at a higher price. I have seen comments in support of price hikes in the comment section, and they sound reasonable. For example, someone mentioned that Canadian goose jackets are priced at over ten thousand yuan, and people are still lining up to buy them. So why can’t domestic down jackets be sold at a high-end price? It’s not like there aren’t down jackets available for a few hundred yuan, so why fixate on one or two thousand yuan? It’s difficult for domestic brands, but can consumers distinguish between a collective price increase and a genuine increase in quality? When comparing down jackets priced at a few hundred yuan now to those from a few years ago, has the quality decreased? Has the sales ratio decreased compared to previous years? Isn’t there any doubt in your mind? I believe it’s not shameful to make money; let’s stop saying that it’s difficult for domestic brands. Domestic brands should set a benchmark for integrity.

Not only down jackets, but also the prices of mobile phones are constantly rising. This year, the starting price of Xiaomi 14 is 3999 yuan, the starting price of Honor 100pro is 3399 yuan, the starting price of VIVO X100 is 3999 yuan, and the starting price of Huawei Mate60 is 5499 yuan. If you choose a higher configuration and opt for the Pro version, the price will reach six to seven thousand yuan. As for the Apple 15, it has always maintained a high price. According to the JFK China Mobile Retail Monitoring data, the average price of mobile phones in the Chinese market in the third quarter has reached 3480 yuan, while the average price in 2019 was only 2685 yuan, showing an increase of 800 yuan in four years. According to e-commerce data, in the first three quarters of 2023, the largest increase in average selling price was in mobile phones, reaching 16.1%, followed by VR all-in-one machines and smart wrist-worn devices, which increased by 10.8% and 10.6% respectively. This year, the increasing number of foldable screen phones from Xiaomi, Samsung, Oppo, Huawei, VIVO, and Honor has also driven up the average price of mobile phones.

To be honest, I believe that the increase in the price of smartphones is slightly better than the increase in the price of down jackets, because smartphones have indeed become much more powerful in terms of chips, storage, screens, fast charging, and cameras compared to previous years. In fact, manufacturers are more inclined to cater to high-end smartphone users who are willing to spend five to six thousand yuan without hesitation. Many people do not care about the frame rate of games because they rarely play games, and they are not concerned about charging speed, whether it’s 20 minutes or 3 minutes. Even if the phone has problems, users will comfort themselves, thinking that it is already a flagship device and not be surprised, but rather consider getting a better one. Only those who buy mid-range or low-end phones may spend all day in online forums, watching review videos on platforms like Bilibili, and arguing in the comment sections. I can do without it, but you can’t. In order to launch flagship devices at higher prices, manufacturers will fully equip phones that cost two to three thousand yuan, raising the price of flagship devices to the level of five to six thousand yuan. One reason is to satisfy the psychological need for cost-effectiveness, and the other is to cater to the belief that higher price means better quality. Manufacturers make profits, and consumers with different psychological needs are also satisfied, so everyone gets what they want.

A few days ago, while having dinner with friends, I noticed that one of them was holding a smartphone that I couldn’t determine if it was a Redmi or a flagship model. This phone was priced at over 2000 yuan, with 16GB of RAM and 1TB of storage space. I couldn’t help but marvel at it, considering that my laptop, which I usually use for video editing, only has 8GB of RAM and 512GB of storage space, often experiencing lag during operation. The increase in price indeed can enhance the user experience, making one feel that it is worth the investment, satisfying the demands for high performance. Consumers are also willing to spend money on such products.

The price increase of down jackets and smartphones is the result of manufacturers’ efforts to target the high-end market. They are collaborating with international designers, engaging in IP partnerships, inviting young idols for endorsements, and investing heavily in information flow advertising. The premise for this move towards the high-end market is the increase in industry concentration. This is also a common characteristic of down jackets priced above a thousand yuan and flagship smartphones. According to a report by Huachuang Securities, the Chinese down jacket market currently shows a situation of two strong players and one weak player, with Montcler and Canada Goose focusing on high-end products priced at around a thousand yuan, while Bosideng is mainly targeting products priced around 2000 yuan. On the other hand, 4G sports and international fast fashion brands are mainly positioned in the price range of 500 to 1000 yuan.

According to data from the China National Business Information Center, as of the end of 2021, the market share of the top ten down jacket brands totaled 40.47%, representing a year-on-year increase of 4.36 percentage points. In the mobile phone market, the combined market share of the four major brands Apple, Huawei, Xiaomi, and Vivo reached 97%, indicating an increasing industry concentration and suggesting that the market is not purely competitive. Based on relevant information, imperfect competition can be divided into two forms: monopolistic competition and oligopoly. Applying this concept, the markets for down jackets priced above 1000 yuan and smartphones priced above 4000 yuan exhibit characteristics of oligopoly, where a few large companies control the majority of market production and sales, with each major player having a significant impact on the market. In times of weak consumer demand and economic slowdown, large companies tend to focus on the high-end market. This is because weak consumer demand can lead to intense price competition in the mid-to-low-end segments, where price reductions may not boost sales volumes but can harm competitors, leading the entire industry into a vicious cycle. Ultimately, the companies that can increase prices without affecting sales volumes will have the last laugh. This situation will present different challenges for large, medium, and small enterprises.

Not only down jackets and smartphones, but also this year’s macro data have almost all been confirmed. According to a report from Huatai Securities, as of September, the head effect of retail enterprises has been further highlighted. The evidence is simple, just look at one indicator: the retail sales growth of enterprises above the quota limit is higher than that of enterprises below the quota limit. The report plots the retail sales growth of enterprises above the quota limit as a trend line and then compares the performance of large enterprises and small enterprises. As of September 2023, the retail sales of enterprises above the quota limit differ by 6.7% from the trend value, a significant reduction compared to the period of the epidemic. However, the gap between the retail sales of enterprises below the quota limit and the trend line has further widened to 23.5%. In the era of consumption contraction, small enterprises have almost no ability to fight back, which is the key issue. It is easy to raise prices, but it is difficult to determine whether consumers will pay the bill after the price increase. Companies like Moncler and Canada Goose can do it, and Bosideng seems to be able to as well, but other fast fashion and sportswear brands are following suit in raising prices, and the result may only lead to one outcome: the entire industry falling into distress.

A typical example could be Baijiu. In recent years, the baijiu market has been booming. From 2016 to 2022, the price of baijiu per ton from baijiu companies has increased from about 45,000 yuan per ton to 78,000 yuan, a 73% increase. During the pandemic, the price increase became even more severe. The average price per ton of baijiu was 78,800 yuan, 84,300 yuan, 93,000 yuan, and 98,700 yuan respectively. However, the result is that profits are being snatched away by wolves in sheep’s clothing, with the national baijiu production last year at 67.12 million kiloliters, half of what it was in 2016, and small and medium-sized manufacturers closing down left and right. This year is even more exaggerated, as although Maotai can raise its ex-factory price against the trend, Wuliangye, Yanghe, and Langjiu can no longer follow suit. In the past few years, the soaring prices of high-end baijiu have encountered a downturn in consumption, with old baijiu enthusiasts unable to afford it and young people not liking to drink it, leading to a suppressed market. Distributors are complaining, but are afraid to lower prices for fear of damaging the brand image. Baijiu companies are all in a predicament. It is still difficult to predict whether Maotai can hold on. Down jackets and mobile phones are also facing the same problem, even eating has become a problem, yet they are still playing with gold and silver tableware, which seems somewhat out of touch. With consumer spending in decline, manufacturers following suit in raising prices, blindly pushing towards the high-end route will only lead to an increase in industry concentration, a shrinking industry scale, and becoming sacrificial pawns. In the face of grains and vegetables, any brand story seems pale and ridiculous.