Fashion obsession is all about names
Another office worker, who wished to be known as Noh, said her Louis Vuitton bag, which she purchased several years ago, has been sitting in the back of her closet. Instead she carries a Chloe handbag she purchased during a business trip to France.
“There are so many Louis Vuitton bags, the brand no longer has any cachet,” Ms. Noh said. Louis Vuitton is a strong brand in Korea. Industry experts say that Louis Vuitton leads the race against other luxury brands with revenues of 100 billion won last year. Earnings from duty-free shops are believed to be much larger.
Sales of Louis Vuitton products have been growing at a rapid pace. Several major department stores say that revenue within the first three months of 2007 is 15 to 20 percent higher than during the same period last year. The Lotte group’s luxury store, Avenuel, in downtown Seoul, has been enjoying great success since it opened its Louis Vuitton store in July 2005. Avenuel said the shop’s revenue has more than doubled since then.
Louis Vuitton, which is run by the French group Louis Vuitton Moet Hennesy, is a brand famous for handbags. The brand is in the same league as other top retailers like Chanel and Hermes. The prices are high and, except at duty- free shops, customers pay at least 1 million won to purchase the product. Yet revenues seem to continuously increase, which leaves some wondering why.
Industry experts say that increased consumption by a range of ages and income groups accounts for the success of luxury brands. Increasing revenue suggests the market has grown, which implies that the number of consumers looking for luxury brands has increased as well.
“Luxury brands are no longer exclusive products, enjoyed by the wealthy,” said Ha Seong-dong at Avenuel. “Those seeking luxury brands among middle-income groups, such as housewives, women with jobs and even college students, has been increasing.” Among luxury brands Louis Vuitton, despite its price tag, has enjoyed the greatest popularity. It is a brand that even those who have little knowledge of luxury brands can approach without fear, because it is so well known.
“We believe 30 percent of Louis Vuitton customers are beginners in this market, who have little knowledge of luxury brands,” said Chung Joon-ho, an executive at Shinsegae International.
“Beginners like the Louis Vuitton products because its logo is simple and visible and the designs are straightforward.”
One industry official, who requested anonymity, said there are different types of customers. First, there are those who visit the luxury brand’s store in Cheongdamdong, one of Korea’s wealthiest neighborhoods. They seek high-end luxury products that not many people know about. The customers in Apgujeong, where levels of wealth are slightly below Cheongdamdong, are conservative and love luxury brand clothing.
The limits that customers set when they buy luxury brands have been going up, as many have been trying to differentiate themselves from the crowd, by shying away from buying products that everyone has. As a result, “Customers end up looking for products with higher value,” said Kim Deok-hee, the team leader in charge of luxury brands at the Galleria Department Store in southern Seoul. The increasing number of working women has also boosted the sales of luxury brands. “A large portion of our customers are women in their 30s and 40s with professional jobs,” said Ham Hye-won of Donna Karan. “Women who have jobs seem to feel the necessity to invest in themselves, for the sake of their social life.”
Son Young-shik, of the Shinsegae Department Store’s overseas luxury team, said Louis Vuitton was popular ten years ago in Japan, where people admire European culture. “The local market is heavily influenced by Japan. The word myeongpoom [literally translated as “high-quality product” and referring to a luxury brand] that is used in Korea came from Japan.”
Aggressive marketing of luxury brands in Korea has also contributed to the growing sales.
Louis Vuitton’s branch in Seoul has strengthened the service mentality of its employees, aggressively sponsored celebrities and reduced the time spent on product repair from one month to two weeks. “Employees no longer approach only those customers who are well dressed,” said a Louis Vuitton branch official. “We have increased our display area so that customers can see new products quickly.”
In a survey of 1,043 members of a women’s Website, www.patzzi.com, it was found that 89 percent owned a luxury product. Of those surveyed, 30 percent had a product from Burberry, 29 percent owned something from Louis Vuitton and 28 percent had an item from Chanel.
In the survey, 34 percent said they purchased luxury brands because they remain stylish at all times. In addition, 21 percent said they bought because the designs are pretty, while 19 percent said their purchase increased their self-esteem.
A 34 year-old woman who works for a public relations company and wishes to be know only by her last name, Lee, owns ten luxury brand handbags. However, she does not think she has been extravagant. “Luxury brand bags are good because they last a long time. The designs are sophisticated but most of all they make me feel good.”
A 55-year-old housewife, who wants to be known as Choi, said she purchased luxury brands because of other people “Among my friends, wearing a St. John suit and a carrying a Louis Vuitton bag has become like a uniform.”
Song Kyung-ah, a well known Korean model who has worked in fashion shows around the world, said there are a lot of luxury brands with a good design but the price tag is just too high, considering the quality. Additionally “the retail price doubles when it comes to Korea,” said Song.
“It seems some customers who lack confidence in their personal taste are more obsessed with brand names,” said Park Sang-wook, an executive at Hermes Korea. “Instead of an individualistic product they prefer things that other people purchase.”
Foreign luxury brands such as Missoni, Valentino and Versace made their first appearance in Korea in 1988, when they opened booths at the Hyundai Department Store in Apgujeong.
In the 1990s, other major foreign luxury brands started to enter Korea. By the mid- 1990s Louis Vuitton and Chanel were well established and Burberry was becoming popular.
However, the luxury brand market faced major changes after Korea’s 1990s financial crisis. Many Korean import companies went bankrupt, and this gave foreign brands the opportunity to enter the market directly.
It was around this time that Etro handbags with designs shaped like pretzels and Salvatore Ferragamo bags with horseshoe- shaped accessories gained wide popularity and were dubbed the “Cheongdamdong daughter-in-law’s uniform.”
Entering the new millennium, Shinsegae International opened its first department catering to smaller designers.
Called Boon The Shop, it carried brands such as Dolce & Gabbana, Vivienne Westwood and Marni. The number of male customers looking for luxury brands increased as well. “In the past, luxury brand clothes targeted to middle age women were popular. Today products that appeal to the younger generation and men are doing well,” said Shinsegae’s Chung.
For many men it is hard to understand why women spend large sums on a luxury brand bag. Experts compare women’s luxury brand obsession to men’s passion for flashy cars. “People want to express themselves by spending,” said Kim Ran-do at Seoul National University. “While older women invest in handbags and shoes, the younger generation tends to invest in their mobile phones. Younger consumers, unlike in the past, when people invested for the future, tend to spend their money for today. “
By Hong Joo-yun JoongAng Ilbo [email@example.com]