Last Year's Per Capita Luxury Spending $325
Significantly Higher Than the US and China
Luxury Brands Courting Korea
A Phenomenon Noted by Overseas Media
Global investment bank Morgan Stanley named South Korea as the country with the highest per capita luxury consumption in the world in a luxury consumption report released earlier this year. According to the report, South Koreans' luxury consumption last year was estimated at $16.8 billion (approximately 22 trillion KRW), a 24% increase from the previous year. When converted to a per capita basis, it amounted to $325 (about 430,000 KRW), significantly higher than the United States ($280) and China ($55).
In fact, the Italian luxury outdoor brand Moncler revealed that its sales in South Korea in the second quarter of last year doubled compared to the pre-COVID-19 period. Cartier's Richemont Group also reported that its sales in South Korea last year recorded double-digit growth compared to the previous year. Prada stated that while its sales in China decreased by 7% last year due to lockdown policies, strong sales growth in South Korea and other countries offset this decline.
Italian luxury brand Gucci held the 'Gucci 2024 Cruise Fashion Show' on the 16th at Geunjeongjeon Hall in Gyeongbokgung Palace, Seoul. Geunjeongjeon, the central building of Gyeongbokgung Palace, was the place where royal ceremonies were conducted and foreign envoys were received during the Joseon Dynasty. Photo by Joint Press Corps
Morgan Stanley analyzed in the report that this demand for luxury goods in South Korea is driven by a culture that values appearance. They added that luxury brands stimulate consumption by utilizing celebrities, and almost all famous Korean entertainers serve as ambassadors for luxury brands.
The French luxury brand Chanel's two price increases this year are also closely related to this background. According to industry sources on the 24th, Chanel recently raised prices on major handbags by about 6%. Last year, Chanel raised prices four times in total?in January, March, August, and November. Despite multiple price hikes, consumers continued to purchase, resulting in sales reaching a record high of 1.5913 trillion KRW, a 30% increase from the previous year.
South Korea's top-tier luxury demand in the world has led to courting by European luxury brands. French luxury brand Louis Vuitton held its '2023 Pre-Fall Collection' on the Han River Jamsu Bridge in Seoul on the 29th of last month. At the time, Pietro Beccari, Chairman and CEO of Louis Vuitton, said, "We are very pleased to hold Louis Vuitton's first Pre-Fall fashion show in Seoul, a cultural hub attracting global attention."
On the afternoon of the 29th of last month, the world's renowned luxury brand Louis Vuitton held its very first Prefall fashion show at Jamsu Bridge in Seoul. [Image source=Yonhap News]
Italian luxury brand Gucci also held its '2024 Cruise Collection Fashion Show' around Geunjeongjeon Hall at Gyeongbokgung Palace on the 16th. The Gucci fashion show took place on the stage of Geunjeongjeon, where major royal ceremonies and receptions for foreign envoys were held during the Joseon Dynasty. This was the first time a luxury brand held a solo fashion show around Geunjeongjeon at Gyeongbokgung Palace, and the event was simultaneously broadcast worldwide via live streaming.
The courting of South Korea by European luxury brands has become a phenomenon attracting attention from overseas media as well. The prominent French daily Le Figaro reported on the 22nd (local time) that "the European luxury industry is focusing on Seoul, South Korea, following Paris, New York, and Tokyo, and is making significant investments." It further diagnosed, "The arrogance of European luxury brands ignoring South Korea, the 'Land of the Morning Calm' nestled between Japan and China, has disappeared, and they are competing to attract the rapidly growing interest of South Korea."
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