South Korea has established itself as a promising market for luxury brands, and is quickly catching up with China and Japan. With its increasing affluence, South Korea has attracted significant investment, which has been boosted by free trade agreements with the European Union. The growth in spending power of its citizens is also a driving force for the luxury market in the country.
Louis Vuitton, one of the luxury brands betting on South Korea, has chosen Seoul as the backdrop for its pre-fall show, scheduled for April 29. The brand has signed a partnership agreement with the Korea Tourism Organization and the Seoul Metropolitan Government, with the aim of promoting and increasing tourism in South Korea, and capitalizing on the strong connections between luxury and the K-pop universe. This partnership is part of the wider 'Visit Korea Year 2023-2024' tourism initiative launched by the South Korean government to attract more foot traffic to the city.
Louis Vuitton's show will take place on the Jamsugyo Bridge, overlooking the Hangang River, which is an icon of the city. The brand has also created a digital travel guide on Seoul and the Han River, which will be available on its City Guide app. Louis Vuitton has appointed the creative consultancy of Hwang Dong-Hyuk, director of the famous TV series 'Squid game', for the scenography of the event, which is expected to host over 1,600 guests.
The luxury market in South Korea has been growing rapidly, and luxury brands are taking notice. According to a report by Euromonitor International, the luxury goods market in South Korea is projected to grow at a compound annual growth rate of 6.2 percent from 2020 to 2025. Investment bank Morgan Stanley said South Korean expenditure on personal luxury goods grew by 24 percent in 2022, reaching 16.8 billion dollars, equal to about 325 dollars per capita.
Strong cultural influence
South Korean culture, particularly K-pop and Korean dramas, has a significant influence on fashion and beauty trends worldwide. This has helped to increase the popularity of luxury brands in South Korea and could continue to drive demand in the future.
Local luxury players
The luxury retail industry in South Korea is highly competitive and includes a variety of local and international players. Some of the most prominent luxury retailers in the country include Lotte, Hyundai Department Store, Shinsegai, Galleria, and AK Plaza. Smaller fashion-driven businesses include Rare Market, Boon the Shop and W Concept. These retailers offer a range of high-end brands, from fashion collections and collabs to accessories, beauty and skincare products. In recent years, South Korea has also seen an increase in the number of luxury pop-up stores and concept stores, which cater to the growing demand for unique and exclusive shopping experiences.
The top luxury brands in South Korea are Louis Vuitton, Hermès, and Chanel, which together made almost 4 trillion won in sales in Korea in 2022, up 22 percent on the previous year. With its strong cultural influence, increasing affluence, and strategic location, South Korea is expected to continue being an important market for luxury brands in the future.