South Korean consumers’ love for luxury labels is encouraging high-end brands to take bold, innovative moves into the market, opening pop-up stores and staging world-exclusive fashion shows. Louis Vuitton, listed by Forbes as the most powerful luxury brand, opened a new flagship boutique in Seoul late last month, a unique building designed by renowned architects Frank Gehry and Peter Marino and located in the high-end Cheongdam neighborhood in Gangnam. Bernard Arnault, chairman of the French luxury goods conglomerate LVMH, which has Louis Vuitton under its wing, attended the opening ceremony of the store during his third visit to South Korea in the last three years.
In April, Louis Vuitton opened a pop-up store for its signature Twist bags in collaboration with Hyundai Vinyl and Plastic in Seoul. It was Louis Vuitton’s second single-theme pop-up store, following its Archlight sneakers pop-up launched in New York in 2017.
In July, Louis Vuitton also teamed up with one of the country’s leading department stores, Shinsegae Department Store, to open its first Asian pop-up space at its Gangnam outlet in southern Seoul entirely devoted to handbags. A limited number of the items were exclusively sold at the store.
The French luxury house has since showcased a series of pop-up stores at department stores in Seoul and the surrounding Gyeonggi Province, offering South Korean consumers the exclusive advance opportunity to buy select items from next year’s collection.
“In the past, I usually purchased bags when I visited Paris as the latest items from the collection were first available there,” Kim Min-kyung, a 36-year-old VIP customer at a local department store, said.
The luxury goods market in South Korea was valued at 14.2 trillion won (US$12.1 billion) last year, up from 11.46 trillion won in 2014, according to market research company Euromonitor International. It is also the fourth fastest-growing luxury goods market in the world behind India, Malaysia and Indonesia. Multiple sets of industry data show sales of major luxury brands grew between 20 and 30 per cent in the country last year, compared with an average of 2-per-cent growth for local department stores.
South Korea’s luxury-handbag market was valued at 3.2 trillion won in 2017, making it the world’s fourth-largest following the US, China and Japan. It also outpaced France, the home of international powerhouses such as Louis Vuitton and Chanel.
High-end jewellery and fashion brands have also held a series of world-exclusive launching events and fashion shows in Seoul. In April, Italian luxury brand Fendi, also part of LVMH, debuted its lively, street-style fashion collection “Roma Amor” at a Lotte Department Store outlet. It was the first time that Fendi has launched a new collection in Seoul.
“The global luxury brand’s launch of a new collection in Seoul illustrates the growth of consumption power among Korean millennials,” Kim Hye-ra, a luxury department chief at Lotte Department Store, said.
The millennial generation, consumers born between 1980 and 1994, approaches shopping differently from older people, whose top priority in consumption is satisfaction. In an apparent move to target the spending power of younger consumers, French luxury house Chanel revealed its exclusive Urban Capsule Collection in collaboration with US pop star Pharrell Williams earlier this year. The collection, vibrant and far from the conventional classics, has been popular among the younger generation.
“Consumption of luxury goods, most noticeably among the so-called millennial generation, has constantly increased despite a slowdown in the economy,” said Ha In-hwan, an analyst at Meritz Securities, adding that international brands are accelerating their push into the country as the market is expected to show continued growth.
Some luxury labels have recently taken further steps by opening branches there in an apparent move to directly target South Korean consumers without going through local importers or distributors that are mostly operated by the country’s major conglomerates.
British-based luxury-handbag maker Mulberry recently took full ownership of its South Korean business by buying Mulberry Korea from local partner SHK. As part of a wider Asian development strategy, Mulberry made an additional investment of 1.3 million pounds.
“Over the last 18 months, we have recruited a new management team and taken day-to-day control of the business in South Korea, an important market for luxury goods where the Mulberry brand has significant growth potential,” CEO Thierry Andretta said in a press release.