After the Third Price Hike This Year, Consumers Turn Away... "Dupe Consumption" Becomes the Trend [Jumeoni Talk]

Luxury Brands Continue to Raise Prices
Growing Consumer Backlash and Declining Performance
Cost-Conscious Shoppers Turn to "Dupe Consumption"

Editor's NoteWe are living in a time when a single serving of samgyeopsal costs 20,000 won and a bowl of jajangmyeon is 7,500 won. The 2024 Consumer Price Index stands at 114.18 (2020=100), and in 2025, high inflation continues to increase the burden on consumers’ shopping baskets. Through the “Jumeoni Talk” (Week+Money+Talk) series, we aim to share stories about consumption that directly affect our wallets, reflecting the ever-changing prices.

As French luxury brand Chanel raised its product prices for the third time this year, the wave of price hikes among luxury brands continues into this summer. With repeated price increases, consumers are feeling fatigued and are turning their attention to more affordable alternatives instead of expensive premium brands. As economic uncertainty grows, a trend prioritizing practicality over conspicuous consumption is spreading.

Prices raised in winter, raised again in summer... Luxury brands continue price hikes

Earlier this month, Chanel raised the prices of some bag products sold domestically. Pixabay

According to the luxury industry, Italian luxury jewelry and watch brand Bulgari is expected to raise the prices of some products sold domestically on June 23. Although the specific items have not been disclosed, it is reported that after raising watch prices in April, Bulgari will now focus on increasing prices for jewelry products.

Chanel raised the prices of some bags starting June 2. The price of the iconic Chanel Classic Medium increased by about 6.6%, from 15.57 million won to 16.6 million won, while the Classic Large rose by about 7%, from 16.78 million won to 17.95 million won. In addition, the Chanel 22 Bag Medium price increased by 8.2%, from 8.67 million won to 9.38 million won, and the Small rose from 8.22 million won to 8.89 million won, also an 8.2% increase. This latest adjustment marks the third price hike by Chanel in Korea this year.

Chanel has sharply raised the prices of major products over the past few years. According to a global investment bank HSBC analysis, the price of the Flap Bag has more than doubled since 2019, surpassing about 10,000 euros (approximately 15.7 million won). This exceeds the 50% average price increase rate in the luxury industry over the same period. In Korea, the Classic Small Flap Bag is also being sold for around 16 million won.

Additionally, Swiss luxury brand Piaget raised product prices by about 6-10% earlier this month, and Swatch Group's watch brands Breguet and Longines also raised the prices of all products sold domestically by about 5% each.

Criticism of luxury brands’ “bold pricing”... Performance warning signs

Pedestrians passing in front of the Chanel jewelry store in New York on the 21st of last month (local time). Photo by AFP Yonhap News

As luxury brands continue to raise prices, criticism of their “bold pricing” is growing in Korea. In the past, brands pursued high-price strategies targeting the “Veblen effect,” where higher prices led to better sales. However, in recent times, such strategies have provoked consumer backlash and even led to deteriorating business performance.

According to foreign media reports, Chanel’s sales last year were $18.7 billion (26.1 trillion won), a 4.3% decrease from the previous year. Operating profit was $4.5 billion (6.3 trillion won), down 30%. Net profit was recorded at $3.4 billion (4.7 trillion won), a 28% decrease. This is the first time since 2020, when stores were closed due to the COVID-19 pandemic, that Chanel’s annual sales and operating profit have both declined. In particular, sales in Asia, including China, fell by 7.1% to $9.2 billion (about 12.8 trillion won), leading the overall decline in sales.

The world’s largest luxury group, LVMH (Louis Vuitton Moet Hennessy), is no exception. The group, which owns Louis Vuitton and Dior, announced that sales in its fashion and leather goods division fell by 5% year-on-year this year. This figure is far below the market estimate of -0.55%.

Affordable alternatives gain popularity amid high inflation... “Dupe consumption” spreads

The SPA brand 'Zara' perfume is being called the 'affordable version of luxury perfumes' on platforms like YouTube. YouTube screenshot

As luxury prices continue to rise, “dupe consumption” is spreading among consumers who prioritize cost-effectiveness. “Dupe” is short for “duplication” and refers to affordable alternatives with similar designs or functions to high-end brand products.

Leading SPA brand Zara offers perfumes with scents similar to those of high-end brands such as Dior, Jo Malone, and Gucci, at prices around 50,000 won. On platforms like YouTube, it is easy to find videos such as “Finding affordable luxury perfume alternatives at Zara” and “Zara perfume recommendations as substitutes for luxury perfumes.”

This trend is also evident overseas. For example, Walmart, the largest retailer in the United States, released the “Walkin Bag,” priced in the 100,000-won range, which resembles the Hermes Birkin Bag that sells for tens of millions of won. The product quickly sold out after its launch. Additionally, leggings made by the athleisure brand CRZ Yoga are more than 50% cheaper than Lululemon’s Align Leggings, but are praised as alternatives due to their similar quality and comfort.