Price Increases Six Times This Year
Excessive Hikes Criticized
Luxury Brands Line Up for Raises
Chanel and Others Expected to Raise Prices Again Early Next Year
[Asia Economy Reporter Seungjin Lee] January, April, May, July, August, and December.
Luxury brand Prada raised the prices of most of its bag products by 5-10% on the 17th. The price of the ‘Prada Duelle Nylon Shoulder Bag’ increased to 1.79 million KRW. This is about a 10% increase from the previous price of 1.64 million KRW. Including bucket bags, most popular products saw price increases on this day, with some products rising by as much as 500,000 KRW.
Price Increase Every Other Month
Prada has raised prices six times this year alone. Starting with a 4% increase in the price of nylon bucket bags in January, the brand has continuously raised prices every month or every two months. In May and August, some product prices were adjusted twice within a single month. For new products not registered on the domestic website, prices were raised without special announcements, effectively resulting in nearly ten price increases within a year.
This recent price increase appears to consider the rising demand for year-end gifts. Bestselling products such as the ‘Prada Re-Edition Saffiano Leather Trim Nylon Shoulder Bag’ have seen prices rise three to four times a year, including this latest increase, causing consumer dissatisfaction.
Ms. Kwon Jin-ah (34, pseudonym) said, "While checking product prices, a store employee explained that prices would go up tomorrow, so buying today would prevent regret," adding, "Prices are rising without clear standards or announcements, making customers feel pressured by the prices."
Raising Prices Now, Planning to Raise Again Next Year
Since COVID-19, luxury brands including Prada have increased prices more frequently. Chanel raised prices four times this year, Louis Vuitton five times, and other luxury brands such as Bottega Veneta, Burberry, and Celine have raised prices one to three times. Due to recent price hikes, the price of Chanel’s popular Classic Bag line has exceeded 10 million KRW.
Luxury brands cite exchange rate fluctuations, rising raw material costs, and increased labor costs as reasons for price hikes, but critics argue that raising prices multiple times a year is excessive. Nevertheless, major luxury brands like Herm?s and Chanel have indicated plans to raise prices again early next year.
Meanwhile, the luxury market has grown larger than ever. Panic buying driven by uncertainty about when prices will rise is intensifying. Alongside this, the number of resellers aiming for price arbitrage has also increased significantly. According to market research firm Euromonitor, the size of Korea’s luxury market this year is estimated at 15.88 trillion KRW, a 4.6% increase from the previous year. This ranks as the world’s seventh largest market.
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