The Luxury Craze: Understanding the Korean Consumer’s Inner Motives
Understanding the consumers who are driving one of Asia's most important luxury markets
SEOUL, October 15, 2013 – The Asia Society Korea Center and the Italian Chamber of Commerce in Korea jointly presented a panel discussion called the "The Luxury Craze: Understanding the Korean Consumer’s Inner Motives." The panelists included Mr. Giuseppe Cavallo, Country Manager of TOD'S Korea, Mr. Henry Shinn, Presenter of the news program Primetime on tbs eFM, and Ms. Sophie Park, Merchandising Team Leader of Lotte Duty Free Shopping.
Mr. Cavallo described Korea as a "dream market" and explained that luxury goods were a status symbol for Koreans. "My first impression of this market was really unbelievable." he said. "People coming out from the store are really excited after buying the bags and shoes. Italians are born with those kinds of things, so we don't dream anymore."
Mr. Cavallo explained some of the changes occurring in the Korean luxury market. "This is an important market for Italian companies. For example, my company, which has many brands, the first of which is TOD'S, we are very famous for showing how to be luxury not in the weekend or at nighttime, but during the day." he said. "When you drive, when you go somewhere. That's the status that this market needs to be."
"Because luxury is not only for one time, luxury is a status." Mr. Cavallo added.
Ms. Park, a buyer for global luxury fashion brands such as Louis Vuitton and Dior, offered insight into the mindset of Korean consumers. "Korean luxury consumers do not merely rely on the brand logo or name, but they're very sophisticated in terms of the trend." she said.
Ms. Park identified the top trends in the Korean luxury market, including uniqueness, men's goods, and "real high-end" goods. "Louis Vuitton has shown decent success for several decades in Korea. However, the numbers are slowing down." she said. "Chanel and other brands are showing explosive growth. Korean consumers are looking more and more for 'real high-end' luxury goods. The definition of luxury has evolved to an advanced pace where only a few select brands fall under it."
Mr. Shinn shared his journalistic perspective on the economic and social impact of Koreans' obsession with luxury goods. After South Korea's rapid modernization and economic growth after the Korean War, members of the upper class sought a way to distinguish themselves from the lower classes by buying expensive western goods. He explained how over the decades, this desire for luxury goods has contributed to issues such as bullying in schools and the pressure to exchange tens of thousands of dollars in luxury gifts between families when a couple gets married.
In response to a question about luxury good theft in Korea, Mr. Shinn pointed out that counterfeit goods are an even bigger problem. "The government is really trying to crack down on the trade of counterfeit goods." he said. "That seems to be a more pressing problem here. Not just for producers but for people who may smuggle in goods from China."