Louis Vuitton Pre-Fall Women's 2023 collection presentation that was held in Seoul, South Korea.
In the recent past, Korea has been in the centre of global entertainment, music, culture and luxury consumption. The frenzy evolved to a level that not only did most luxury brands adopt to appointing Korean celebrities as their global brand ambassadors, but top names like Louis Vuitton and Gucci held their collection presentations at cultural hubs of Seoul in South Korea.
So what really is behind this build up?
A quick flash back check into Korean history reveals a few interesting pointers on how this evolved over the years. In the early 20th century, Koreans were officially introduced to the western world and their ways of living. Prior to this, almost all Koreans wore their traditional Hanbok clothing. Nowadays, it is only worn on special occasions or anniversaries.
The traditional Hanbok clothing worn by Korean women – now on rare occasions only.
Post the end of the Korean war in 1953, western contemporary fashion gained momentum. Most South Koreans started adopting styles influenced by USA – think crimped hair, swimsuits, and brighter makeup options.
Through the 1960s and 70s, with the growth of Korean broadcasting companies, the Korean drama genre rose in popularity. In the 1990s and 2000s, youth-oriented, soap-opera style Korean dramas took hold, and pushed the Korean drama genre into the international sphere.
In parallel, in the 1990s, Korean pop musicians incorporated partially Europop and mostly American popular music styles such as hip hop, rock, jazz, and electronic dance in their music. K-pop began to emerge as a significant influencing force. In 1992, the emergence of Seo Taiji & Boys marked a revolutionary moment in the history of K-pop. And then, in 2012, PSY's mega popular song Gangnam Style hit the world. The next year, BTS debuted with their first-ever single, No More Dream. Rest, as they say, is Korean history!
…Chanel hiked the prices four times in 2022 and Louis Vuitton twice. Higher price tags did little to discourage Koreans interested in French luxury goods.
This statue in Gangnam-gu district in Seoul, South Korea, gives a tribute to the incredibly popular namesake song by PSY.
Soon a wave of Korean influenced dramas and music went viral. The pandemic, especially, played a major role in the spread of the ‘Korean wave’, when locked into their homes, people discovered popular dramas like Squid Game amongst others. Though K-dramas have recently taken off in the western world, they’ve been popular in Asia for years. In fact, K-dramas have long been one of the key drivers of the Korean Wave, or “Hallyu,” a term believed to have been first coined in the 1990s to refer to the growing popularity of K-dramas, K-pop, and other Korean cultural exports. Since then, the Korean Wave has rapidly spread to all corners of the globe.
South Korea’s Love affair with Western Luxury
Over the past few years, Seoul has emerged as Asia’s trendsetter in the fashion, movie and beauty industries. Armed with a vibrant cultural, pop landscape, television dramas, singers and actresses have revamped the country’s image into a glamorous destination. The country first opened up its market for luxury imports in the late 1980s. Luxury fashion brands from countries like Italy, France and UK rapidly gained popularity among consumers in their 40s and above to drive the first boom of luxury consumption. Louis Vuitton, Hermes and Chanel were amongst the first to open boutiques in Seoul during 1990s. The traditional designs and high price tags did not do much to attract young Koreans then.
The Frank Gehry designed Louis Vuitton store that opened in Seoul in 2019.
The second wave of luxury consumption accelerated in the 2000s when the middle class consumer took to luxury consumption. However, it was only since 2015 when these high-end brands have been successful in targeting Korean consumers in their 20s and 30s with revamped designs and new marketing strategies, making good use of their online stores.
And now, the post-pandemic boom is driving the third wave of luxury into the country. Sales of global brands like LV, Gucci and Chanel saw a resilient demand during and post-Covid in South Korea. In 2022, South Korea, the worlds 10th largest economy, saw its luxury market grow by 24% on a YOY basis to $16.8 billion, ranking seventh in terms of global luxury sales. South Koreans’ luxury spending has already exceeded that of Americans and Chinese. According to Morgan Stanley, Korea's per-capita spending on European luxury goods was tallied at $325 last year, the highest in the world. Americans spent $280 per person, and China – $55.
According to Il Sole 24 Ore, an Italian media outlet, exports of Italian luxury goods to South Korea saw a rise of 4.4% in 2022. Leather products, shoes, fashion apparel and jewellery mainly contributed to this rise in demand. Most Koreans were willing to wait in line for hours, rain or shine, to enter the shops and get their hands on these items, Taking advantage of this undying demand, Chanel hiked the prices four times in 2022 and Louis Vuitton twice. Higher price tags did little to discourage Koreans interested in French luxury goods. On the contrary, this price rise may have even actually encouraged sales.
Luxury Brands riding the Korean Wave
Korean dramas, K-Pop, films, online games, K-Beauty, and food have all contributed to the Hallyu wave. And therefore, European luxury brands have recognised the lucrative potential of Korean celebrities as global brand ambassadors. Business Of Fashion states: “As South Korean pop music becomes an increasingly global obsession, and as luxury megabrands sign more and more deals with its leading stars, K-pop groups’ fanatical young followers have become a fixture.”
South Korea's pop culture, commonly referred to as the "Hallyu Wave," has spread globally, garnering immense attention and followers.
Blackpink's Lisa attending a 2022 Bulgari Gala with other brand ambassadors – Anna Hathaway & Priyanka Chopra Jonas.
While BTS’s J-Hope is a brand ambassador for Louis Vuitton, Exo’s Sehun and Blackpink’s Jisoo endorse Dior and Blackpink’s Lisa advocates Celine and Bulgari. Squid Game’s lead actor – Jungjae Lee – is Gucci’s ambassador from South Korea. The incredibly popular Jimin from BTS is Tiffany & Co’s answer to the Hallyu Wave. This list goes on.
The cultural relevancy angle
As a natural extension to above developments, global luxury brands are now moving beyond just appointing brand ambassadors to capture more interest from Korean youth.
In 2021, Burberry opened a mirage-like pop-up on South Korea’s Jeju Island; in 2022, Breitling opened its biggest store ever in Seoul – which also includes its first ever café; and in 2023, luxury brands created runways at Korean heritage sites to entice Korean consumers in their home base, in their way.
Louis Vuitton showcased its pre-fall women’s 2023 collection at the Jamsugyo Bridge over the Han River on April 29, 2023 – as a part of their deal with Korea Tourism Organisation to promote tourism in Seoul. Likewise, Gucci, in order to honour their 25-year-long prosperous run since their first store opened in 1998, conducted their Cruise 2024 fashion show in Seoul, against the majestic backdrop of the city's historic and cultural landmark, the Gyeongbokgung Palace, on May 16.
Gucci's Cruise 2024 collection presentation that was held at Gyeongbokgung Palace in Seoul, South Korea.
“We will work as a cultural mission of South Korea to spread the historical value and the beauty of Gyeongbokgung through our fashion show,” said Gucci, which has pledged to support a project at the historical site aimed at improving visitor experience. The Italian fashion house had announced a three-year commitment to supporting the conservation and restoration of Gyeongbokgung.
To conclude
South Korea has indeed become a significant market for luxury brands in recent years. Several factors contribute to the favourable situation for luxury brands in the country, encompassing its robust economy, unique cultural preferences, evolving political landscape, and discerning consumers.
1. Strong Economy: South Korea boasts a thriving economy characterized by high income levels and a large middle class. The country has experienced rapid economic growth, which has led to increased disposable income among its citizens. This rise in affluence has created a strong consumer base capable of affording luxury goods.
2. Rising Fashion and Beauty Industry: South Korea has emerged as a global trendsetter in the fashion and beauty industry, with the concept of "K-beauty" and Korean fashion gaining immense popularity worldwide. Korean celebrities and influencers have a significant influence on fashion trends, and this fascination with style and aesthetics contributes to the demand for luxury brands.
3. Technologically Savvy Consumers: South Koreans are known for their tech-savviness and early adoption of new technologies. E-commerce and digital platforms have flourished in the country, allowing luxury brands to connect with consumers online and offer personalized shopping experiences. The tech-forward nature of South Korean consumers aligns well with the digital strategies employed by luxury brands.
Burberry's Imagined Landscape pop-up at Jeju Island in South Korea.
As South Korea continues to flourish economically and exert its cultural influence globally, luxury brands are likely to find significant growth opportunities in the country in the near future.
4. Pop Culture and Hallyu Wave: South Korea's pop culture, commonly referred to as the "Hallyu Wave," has spread globally, garnering immense attention and followers. K-dramas, K-pop music, and Korean movies have generated significant interest in Korean lifestyle and products, including luxury brands. This cultural phenomenon has influenced the perception of luxury brands, making them highly desirable among fans of Korean pop culture.
5. Social Media and Influencer Marketing: South Korea has a vibrant social media landscape, and influencers play a crucial role in shaping consumer behavior. Influencers and celebrities in the country often collaborate with luxury brands, showcasing their products to millions of followers. This influencer marketing approach effectively reaches the target audience and creates a sense of aspiration and desirability.
6. Political Stability and Intellectual Property Protection: South Korea benefits from a stable political environment and strong intellectual property protection laws. Luxury brands value countries with stable governments and robust legal frameworks to safeguard their trademarks and designs. The presence of favorable conditions for protecting intellectual property rights contributes to attracting luxury brands to invest in the country.
7. Discerning Consumers: South Korean consumers have a reputation for being discerning and highly selective about the products they purchase. They prioritize quality, craftsmanship, and exclusivity, which aligns with the values and offerings of luxury brands. This demand for high-end products ensures a receptive market for luxury brands in South Korea.
Overall, the convergence of South Korea's strong economy, fashion-forward culture, digitally savvy consumers, influential pop culture, stable political environment, and discerning consumer preferences creates a favourable situation for luxury brands. As South Korea continues to flourish economically and exert its cultural influence globally, luxury brands are likely to find significant growth opportunities in the country in the near future.
Abhay Gupta, a certified Marshall Goldsmith coach, is the founder, promoter and CEO of Luxury Connect (a boutique consulting organization) and Luxury Connect Business School (LCBS). Author of The Incredible Indian Luxury Bazaar, he has helped establish luxury brands like Versace, Versace Home, Versace Collection, Corneliani, Arredo Classic, etc in India. Luxury publication Blackbook recognizes him as one of the ‘Top 100 Indian Luxury’s Most Influential’. He is also a recipient of the ‘Luxury Retail Icon 2012’ title by Asia Retail Congress. Having being featured in Forbes Luxury Trend Report 2012 as one of the industry leaders, he has also been widely recognized as a luxury expert by many media organisations. Fondazione Altagama has also recognized his contribution to the growth of Italian luxury industry by his pioneering efforts in India.
