Changing face of luxury in Asia
By FashionUnited
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McKinsey’s latest report on luxury goods concludes that there’s now an important shift in the fashion-savvy Korean market, which was worth $4.5bn last year. People used to buy brands to show they were keeping up with trends and to show
off that they had cash to flash. Now, McKinsey’s latest survey suggests people are buying brands to stick out from the crowd, not be part of the craze.McKinsey notes there is also strong potential for men’s luxury goods, which still only account for 9 per cent of the luxury market – half of the level in Japan. Young people are also rapidly turning into fashion victims. Sales to 20-somethings rose at a stunning annual rate of 74% from 2005-10, compared to 9%
for 50- to 60-year olds.
What McKinsey shows is that Korea is still a good place for fashion houses – luxury sales have been up about 12 per cent each year since 2006 – but they must adapt to changing trends.
Intriguingly, several luxury goods makers note Korean culture is becoming so hip around Asia and beyond thanks to TV dramas and music, that they need a strong foothold in Seoul to identify trends that could spread from there.
But there’s also an unhappy dimension to luxury in Korea, as the gulf between rich and poor becomes increasingly severe.
While the McKinsey survey shows that Koreans are still more likely than the Japanese, Europeans or Americans to be willing to pay full price for luxury, at the same time, more and more are seeking out bargains.
Image: Louis Vuitton Seoul