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DCF and vIndustry oaluation pverview arameters PPage 53age 53 I Points of view from EY global sector Digital tango with China and other industry professionals Generally, entities with a higher rating from customs New trends in customers’ and companies’ The best plaqers oe’re obserning are defining a are entitled to more beneficial treatments dmring the behavior in China blended strategy for each market, with different clearance process. approaches for mega cities than for rural areas, Kpecificallq, an advanced authorized enterprise may Luxury customers’ buying strategies diverge leneraging Öagships on the mmst%be%seen streets and enboq the follooing cmstoms benefits2 Customers that have access to global pricing save A-list locations, delivering sophisticated digital 1. Lower inspection rate of imported and exported money by buying online, mainly through marketing on Asian platforms (also third-party goods e-marketplaces. These additional savings can in turn platforms) and providing story and content to 2. Kimplified review of documents for imported and be used to buy luxury goods. Customers are able to generate social conversations. w exported goods buy more for less. The mindset for 2016 is to move the focus from ervie increasing walk-ins in the shops to engaging v 3. Prioritized customs clearance formalities for consmmers in a more Öexible, digital omni%channel try o imported and exported goods Company sales’ strategies converge platform that is anailable *,'/ for continmed 4. Customs inspection and release of imported and Companies that pursued the mass market previously profitabilitq. Indus exported goods before commoditq classification, are now trying to upsell their brand, since new digital customs valuation and country of origin are customers from lower tier cities are likely new to their determined or other customs formalities are brands. In addition, luxury brands are introducing completed new lines, which are capturing these new online 5. Customs assignment of coordinators for customers, in order to prevent down selling of their enterprises original brand. In this context, luxury is no longer In addition, an advanced authorized enterprise is now defined as scarce, bmt characterired as haning a long, treated as an authorized economic operator (AEO) in mniime and amthentic brand storq of craftsmanship. China. The government has agreed with several comntries'regions Kingapore, @ong Cong, Komth Korea) to mutually recognize an AEO. Under such agreements, Chinese customs and participating comntries'regions oill provide conveniences for the goods imported by one AEO enterprise from another AEO enterprise. The luxury and cosmetics financial factbook 2016

Luxury and Cosmetic Financial Factbook - Page 55 Luxury and Cosmetic Financial Factbook Page 54 Page 56