From today, Estee Lauder has cut the recommended retail price of products sold in China by as much as 23 percent as a result of the government’s decision to cut importation tariffs.
China’s Ministry of Finance announced in May that it was slashing importation tariffs by as much as 50 percent on 14 types of imported products such as skincare, clothing items and diapers.
The move was part of a strategy to reduce overheads for brands, thereby enabling them to lower prices in order to stimulate consumer spending and drive the national economy forward. Other cosmetics brands have also recently reduced the price of products sold in China such as L’Oreal, Shieseido and Amorepacific
The provisional tariff on imported skin care products was lowered from 5 percent to 2 percent, according to the Ministry.
The price-cutting trend may lead to widespread action in which American and European brands are forced to evaluate their traditionally high price policies in the Chinese markets. Coupled with the rise of ecommerce, prices are already under pressure, according to He Mu, Founder of Shanghai-based Wisdom Aid consultation group.