"Why Is the Quality So Poor for Luxury Goods?" Luxury Jewelry Brands Raise Prices Seven Times in Three Years in Korea [Luxury World]

Cartier Implements Third Price Hike This Year
Multiple Rounds of Price Increases Become the Norm Among Global Luxury Brands
Cartier Faces Product Defect Controversy
Consumers Say, "Worrying About Luxury Quality Makes No Sense"

Global luxury brands have once again implemented multiple rounds of price hikes this year. Traditionally, luxury brands would raise product prices once annually, but in recent years, it has become common practice to increase prices two to three times per year. Luxury brands claim that rising raw material costs and high exchange rates leave them no choice but to raise prices. However, critics argue that both the frequency and scale of these price increases are excessive, even when accounting for the rise in gold prices and exchange rates.

The Van Cleef & Arpels piece is on the left, the necklace and earrings in the center are Cartier, and the necklace and ring on the right are Bulgari.

According to industry sources on October 12, luxury jewelry brand Bulgari is reportedly planning to raise prices after the Chuseok holiday. This comes just four months after Bulgari increased the prices of jewelry and other products by an average of 7-10% in June. If the price hike is implemented, it will mark the third increase by Bulgari this year, following previous hikes in April and June.

Bulgari is not the only brand to have raised prices more than twice this year. Cartier has increased prices three times in total (February, May, and September), and luxury watch brand IWC has also implemented three price hikes (March, June, and September).

Other brands such as Boucheron (February, July), Van Cleef & Arpels (January, April), Tiffany (February, June), Damiani (February, July), Rolex (January, July), and TAG Heuer (January, July) have all raised prices twice this year. The rate of increase has generally ranged from 5% to 10%.

Luxury brands cite rising gold prices and high exchange rates as the main reasons for these price hikes. According to the New York Mercantile Exchange, on October 1 (local time), the December gold futures price closed at $3,897.50 per ounce (approximately 5,458,000 won), setting a new record for the highest closing price. With the strong dollar trend continuing, the won-dollar exchange rate has remained in the 1,400 won range over the past month.

However, some argue that the pace of price increases by overseas brands is excessively fast, even when considering inflation, exchange rates, and gold prices. For example, Cartier, which has raised prices three times this year, increased prices by 6% in both February and May, and by about 2-5% last month. Even with a simple calculation, the cumulative increase amounts to 14-17%.

Some products are reported to have risen by nearly 20% this year alone. A domestic jewelry industry insider explained, "As consumer spending has shifted from luxury bags and clothing to jewelry, the trend of multiple price hikes for luxury jewelry has become more pronounced. Domestic jewelry brands are also adjusting prices to reflect higher gold prices, but they have no choice but to consider the price resistance level."

Some observers suggest that the strong demand for luxury goods among Korean consumers is influencing these price hikes. According to Bluebell Group, an Asia-based distribution specialist, 73% of domestic consumers responded that they would still consider purchasing luxury brand products even if prices rise. Additionally, 76% said they view luxury goods as investment items, and 80% emphasized the importance of brand reputation.

Meanwhile, the domestic performance of overseas luxury brands continues to soar. Richemont Korea, the Korean subsidiary of Richemont Group, which owns Cartier and Van Cleef & Arpels, recorded sales of 1.7952 trillion won for the last fiscal year (April 2024-March 2025), a 19.6% increase from the previous year. Tiffany Korea and Bulgari Korea reported sales of 378 billion won and 419.1 billion won, respectively, last year, up 7% and 23% from the previous year.

The problem is that despite these price hikes, product defect controversies persist. On luxury online communities, there have been multiple posts claiming that "the durability of products purchased from Cartier is not what it used to be." Notable cases include a Love Bracelet that became discolored even though it was only stored after purchase, and a customer who requested an exchange for a watch due to a movement defect but was told it could only be repaired.

According to the current consumer dispute resolution guidelines, defects occurring within six months of purchase are considered manufacturer defects and are eligible for exchange or refund. However, in the case of Cartier, customers are sometimes required to pay for repairs or send the product to the headquarters in France to determine whether repair or exchange is possible. In response, consumers have stated, "It makes no sense to worry about quality when we are essentially paying for the brand," and are reportedly considering filing a collective dispute mediation application.