[NEWS IN FOCUS] Korean millennial moms flock to Dior, Burberry for baby clothes

Industry

Published: 02 Dec. 2023, 06:00 Updated: 03 Dec. 2023, 16:47

[NEWS IN FOCUS] Korean millennial moms flock to Dior, Burberry for baby clothes

A Baby Dior store in Shinsegae Department Store's Gangnam branch in southern Seoul [SHINSEGAE DEPARTMENT STORE]

If you browse the blogs and social media of young Korean mothers, it is not difficult to spot babies flaunting luxurious clothing from fashion houses like Christian Dior and Burberry.

Those mothers, mostly millennials, are the primary driving force of the premium children's market in Korea — a country with the world's lowest birthrate but a thriving market for children's merchandise.

Kids' clothes market size in Korea [NAM JUNG-HYUN]

The country's fertility rate has consistently hit record lows in recent years, falling below one for the first time in 2018 and further dropping to 0.78 in 2022. Yet the overall size of Korea's kids' industry expanded from 8 trillion won ($6 billion) in 2002 to 40 trillion won in 2017, according to data from KT's economic research institute.

Despite the decline in potential customers, commitment from parents and relatives to provide the best for their limited number of children is driving growth in premium kids' products — even as the prices of essential child care items rise.

Baby Dior [SCREEN CAPTURE]

VIBs: Very Important Babies

Renowned luxury brands such as Fendi, Dior, Burberry, and Moncler are opening new children's clothing lines in Seoul department stores, defying the trend of low birthrates.

Thirty-five-year-old Kim, who lives in Seoul, recently purchased clothing from Burberry Kids at the Shinsegae Department Store's Gangnam branch — for her niece.

“Since I don't plan to have children of my own, I like buying gifts for my niece,” Kim said, while adding, “As I'm searching for a gift, I end up choosing higher-priced items.”

Such sentiment aligns with the growing preference for premium products as millennials, now parents themselves, prioritize high-quality items for their children.

[WHY] Why do Koreans love luxury brands so much?

“While the absolute size of the child population is decreasing, the brands preferred by young parents are becoming more diverse,” noted Jeong Eun-hye, chief buyer for kids at Lotte Department Store. “Expectations among young mothers are believed to heighten even further.”

Year-on-year growth rates in both the children's category and the high-end children's fashion category at major department stores in Korea [NAM JUNG-HYUN]

According to the department store industry, the growth rate for the entire children's category this year, from January to October, compared to the same period last year was 5 percent at Lotte Department Store, 5.7 percent at Shinsegae and 21.1 percent at Hyundai.

Regarding specifically luxury children's items during the same period, Lotte Department Store showed a growth rate of 10 percent, Shinsegae of 16.2 percent, and Hyundai of 33.7 percent — indicating a higher growth trajectory. Such figures can expand further during the fall and winter seasons, when higher-priced items such as outerwear tend to sell more.

“Not only do mothers visit, but also grandmothers, grandfathers, and relatives come to buy gifts for children,” shared a merchant from the Burberry Kids shop at Shinsegae Department Store on Nov. 3, referring to the so-called 'Ten Pockets' trend.

The very first 'Patagonia Kids' store globally opened in Lotte Department Store's Jamsil branch in southern Seoul in October. [LOTTE DEPARTMENT STORE]

The inclination toward premium products is not confined to clothes; it has permeated the full spectrum of children's goods in Korea.

Data from the e-commerce platform Auction revealed that during the first quarter of 2022, strollers and car seats saw an 8 percent year-over-year increase, baby furniture and beds 47 percent, baby chairs 26 percent, formula products 16 percent, diapers 19 percent and feeding items 35 percent.

Eland Group's children's clothing brand, milibam [ELAND GROUP]

Home grown labels broaden children's collection

Korea's blooming children's market is backed by data.

According to the Korea Federation of Textile Industries, the market size for children's clothing reached 1.2 trillion won last year, a 31.8 percent increase compared to 2020. This growth rate is more than double the 13.5 percent increase observed in the overall fashion market during the same period.

Domestic companies are also eyeing the children's clothing market for expansion.

Eland Group, which operates more than 30 brands including children's clothing, casual wear, men's clothing and women's clothing, is a prominent example. Despite the low birthrate trend, the Korean fashion company has outlined a blueprint for growing its flagship children's clothing brand, milibam, from cumulative sales of 35 billion won this year to 100 billion won by 2025.

“Although the overall birthrate is declining, the sales growth rate for our children's clothing across different age groups continues to rise,” said a spokesperson from Eland. “Aligning with this trend, milibam is steadily opening stores in shopping complexes for young parents with toddlers, expanding external distribution channels in line with our sales target plan.”

Industry experts anticipate that the Korean government's strengthened policies to overcome the low birthrate could lead to increased consumption of child care products.

"While previous support measures focused on indirect aid, such as expanding child care personnel and strengthening public education, recent direct policies such as cash payments and tax deductions are expected to further boost the consumption of child care products," said Lee Seok-young, a researcher at Daishin Securities.

Baby products, including diapers, displayed at a mart in downtown Seoul [YONHAP]

Baby budget flies

However, the surge in demand for children's products comes at a cost, as prices for essential child care items such as formula, diapers and children's clothing have witnessed a significant uptick this year.

More than half of the 11 products and services commonly used by households with infants, including children's clothing, diapers and toys experienced inflation rates exceeding the overall average of 3.7 percent this year, according to Stastics Korea. Particularly, the inflation rate for children's clothing is currently the highest recorded since 1985, and considering year-end gift demands, prices may rise even further.

“As the birthrate decreases, there is a growing trend of 'premiumization' in child care products,” said Park Jin-a, a researcher at the Korea Institute of Child Care and Education. “By measuring child care cost inflation, it becomes possible to design more the detailed support needed to alleviate the financial burden on households with young children.”

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]