South Korea, the fourth largest economy in Asia, has been aptly named ‘a luxury powerhouse’. Luxury expenditure increased by 41% between 2008 and 2013, with the average household’s spend climbing to 5%, surpassing Japan (4%). The high-income bracket of $150K+ USD increased by 11%, exceeding the average population growth of 0.4%. A survey conducted by Korean Consumer Agency revealed that 37% of respondents were willing to reduce household expenses to facilitate increased luxury spending. Essentially, luxury in Korea has become a classless industry. (Sources: Euromonitor & McKinsey)
Korea’s vast commercial potential is closely linked to ‘K-pop’ culture and the widespread popularity of TV dramas such as ‘My Love from the Star’ which was viewed by more than 34M people in January 2014. K-pop has instilled an acutely image-oriented mind-set among a young demographic, the extent of which can be seen in the onset of its own, unique language. Adjectives such as ‘X-Line’ (referring to a body shape of a small narrow waist with long arms and legs) and ‘V-Line’ (describing the shape of a person’s jaw, which can be altered by a ‘jaw shaving’ procedure) are emblematic of an image-sensitive youth culture. While these might be extreme examples, they illustrate the extent to which lifestyle questions have begun to define the Korean luxury landscape.
Beauty and fashion are the two strongest industries within the Korean luxury market, with Koreans placing an emphasis on appearance, a healthy diet and good work/leisure balance. Spa sales generated total revenues of $466M in 2012, and are forecasted to reach $600M by 2017. A standout brand in the Korean luxury market is SK-II, which educates customers on skincare, starting with a “vision scope” examination that identifies the customer’s existing skin problems. The SK-II team then design a facial program specifically for that customer’s skin. Each treatment program uses 16 types of product and lasts for 99 minutes. The brand focus is on meeting customer demand for education, well-being, and a lavish VIP experience.
Another spa to catch the eye of the Korean consumer is La Boutique Bleue, which has diversified in an attempt to attract a male client base. La Boutique Bleue offers male-specific services, specialising in pampering for “busy executives”: body slimming; eyelash/eyebrow tinting; eyelash perming; and a body massage including waxing and make-up. According to Euromonitor, men’s grooming has increased by 7% in value terms, with men’s skincare growing by 9%.
The clothes make the man and woman in many cultures, but in Korea, clothes have become the main vehicle through which consumers aspire to new heights of outward self-expression, and a shopping infrastructure has emerged to cater to this fashion-sensitive market. Apgujeong-dong is the jewel in the crown of Korean luxury spending, and as the most prominent shopping area in Korea it has been dubbed the “1st Street of Fashion”. Brands including Louis Vuitton, Prada, Cartier and Burberry can all be found here.
Forget diamonds; shoes are a girl’s real best friend. With Korean customers’ unique taste in fashion, the usual shoe brands might be perceived as a bit boring. However, browsing the Luxe City Guide, we found a concept shoe store that stands out from the rest. Jinny Kim offers Korean customers a more personal experience. From the very start, “Hollywood glamour” was the concept they adopted; their objective is to make every customer feel like a movie star.
Another must-visit on the luxury consumer’s journey is the Galleria department store. With an opulent exterior that sparkles throughout the night, it’s hard to miss; world-renowned architect Ben van Berkel pioneered the use of giant LED lights to showcase different patterns on the walls. The Galleria department store has expanded to other Korean cities. From the first floor to the fourth, labels such as Chanel, Hermes, Cartier, Tiffany and Goyard are heavily featured.
The Korean appetite for luxury is almost exclusively sated on fast-paced fashion trends and personal care, and as a luxury destination, the country still falls short of cosmopolitan prominence. However, if Korea continues down this path, perhaps we will see a greater focus on other luxury areas such as food, hospitality and entertainment.