Import Value of Luxury Bags Over 2 Million Won Continues to Rise
"Suppressed Consumption Desire and Compensation Psychology Due to Corona at Work"
In the past four years, the import value of luxury bags has increased by more than 200%. The import value of luxury watches also nearly doubled during the same period.
According to data received by Yang Kyung-sook, a member of the Democratic Party of Korea, from the Korea Customs Service on the 9th, the import value of high-end bags with a declared price exceeding 2 million KRW rose from 221.1 billion KRW in 2018 to 791.8 billion KRW last year, marking a 258.1% increase over four years.
The Korea Customs Service does not classify luxury bags as a separate category in import declarations. Therefore, this data represents the import value of bags subject to taxation, specifically those priced over 2 million KRW.
Looking at the growth rate of high-priced bag imports, it was 17.1% compared to the previous year in 2018, but then sharply increased to 33.8% in 2019, 33.0% in 2020, 44.9% in 2021, and 38.9% last year.
The annual import values were 295.8 billion KRW in 2019, 393.6 billion KRW in 2020, 570.1 billion KRW in 2021, and 791.8 billion KRW last year. The number of import cases also rose from 9,716 in 2018 to 15,436 in 2019, 21,349 in 2020, 31,569 in 2021, and 37,831 in 2022, representing a 289.4% increase over four years.
Luxury bag consumption continues to rise even after the COVID-19 pandemic. From January to July this year, the import value of high-priced bags was 572.7 billion KRW, a 27.0% increase compared to the same period last year (451.1 billion KRW). Although this growth rate is lower than last year's 38.6%, it remains high. If this trend continues, the annual import value this year is expected to surpass last year's figure of 791.8 billion KRW.
The import value of high-end watches priced over 2 million KRW also increased. It rose from 508 billion KRW in 2018 to 624.7 billion KRW in 2019, then decreased to 590.3 billion KRW in 2020, but jumped again to 684.2 billion KRW in 2021 and 929.7 billion KRW last year.
Last year's import value represents an 83.0% increase compared to four years ago, and the import value from January to July this year was 532.5 billion KRW, a 2.8% increase compared to the same period last year.
Analysts suggest that this phenomenon is partly due to pent-up consumer demand during the COVID-19 period, accumulated purchasing power, and a compensatory psychology that has fueled luxury consumption.
In fact, despite the consumption slump caused by COVID-19, the domestic import clothing and luxury market has expanded continuously in recent years. As a result, more than 30 overseas luxury brands have either directly entered or announced plans to enter the Korean market over the past three years since the pandemic began.
Following OTB Group, which owns luxury clothing brands such as Maison Margiela and Marni, last year, this year saw brands like Chlo? (Richemont Group), Celine (Louis Vuitton Mo?t Hennessy·LVMH), and high-end watch brand Audemars Piguet establish separate corporations and directly enter the Korean market.
Additionally, luxury consumption, once considered exclusive to the wealthy, is now spreading to the middle class, especially among the MZ generation, which is interpreted as a recent trend.
Lawmaker Yang stated, “Despite high inflation and economic slowdown, the luxury market continues to grow,” and emphasized, “It is necessary to study the social impact of this deepening consumption polarization and to consider ways to guide it in the right direction.”
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