‘8th in the World Last Year Too’ Korea’s Love for Luxury Unshaken by COVID... The Reason Behind Louis Vuitton’s Expansion

8th in the World for 2 Consecutive Years... 14.8 Trillion Last Year, 4.6% Growth
Euromonitor "Broad Consumption by Korean Consumers is a Growth Factor"
Louis Vuitton and Others Begin Expanding Stores... Department Store Industry 'Strengthening Luxury'

[Asia Economy Reporter Lee Seon-ae] The luxury market in Korea remains unthreatened even by the spread of the novel coronavirus infection (COVID-19). Korea's luxury market ranked 8th in the world last year and showed a steep growth rate, with expectations of continued strong growth this year. Global luxury companies are focusing on the growth of the Korean luxury market, which acts as a trendsetter, and are actively pursuing market expansion. They are expanding not only store renovations and enlargements but also broadening their main product lines from bags to shoes and clothing.

According to global market research firm Euromonitor on the 11th, the size of Korea's luxury goods market last year was $12.7267 billion (14.8291 trillion KRW, based on the fixed 2019 exchange rate of 1,165.200 KRW per USD), an increase of 650 billion KRW from the previous year's $12.1685 billion (14.1787 trillion KRW). Korea ranks 8th globally, following the United States, Japan, China, France, Italy, the United Kingdom, and Germany. Since 2013, the Korean luxury market has shown an average annual growth rate of 6.5%, with 4.6% growth last year. This figure is based on domestic sales excluding duty-free, secondhand markets, and black markets, so the actual market size and growth rate are estimated to be much larger and steeper.

Next to the Louis Vuitton store located on the 1st floor of Times Square (Shinsegae Department Store Yeongdeungpo Branch Luxury Hall), an expansion construction is underway. Photo by Lee Seon-ae lsa@

◆Louis Vuitton, Gucci, and others compete to expand stores= Luxury brands focusing on the growth of the Korean market are putting effort into business expansion. Louis Vuitton is currently expanding its store located in the Shinsegae Yeongdeungpo Department Store luxury hall (Times Square 1st floor). A Shinsegae Department Store official said, "Louis Vuitton renewed its store last year, and construction is underway to expand additional space next door. However, the exact opening date is uncertain due to variables such as securing luxury products."

Louis Vuitton's store renovation aims to strengthen men's products and diversify sales beyond bags to include clothing, shoes, and accessories. The MZ generation (Millennials and Generation Z), emerging as a major luxury consumer group, shows more interest in shoes and clothing beyond bags, and men's purchasing power is increasing to a level comparable to women's, prompting a change in operational strategy accordingly.

Gucci is also taking active steps. Focusing on men's purchasing power, it has separated men's and women's clothing in boutiques in Cheongdam, Galleria luxury hall, Lotte main stores in Jamsil and Busan, and Shinsegae Gangnam and Centum City stores. The Lotte main store has expanded and reopened separate men's and women's stores, and in Jamsil, it has additionally opened women's fashion accessories and clothing stores, operating three stores including men's. Recently, the Lotte Busan main store also renewed and reopened women's and men's stores. Salvatore Ferragamo has separated men's and women's stores in Shinsegae main store and Gangnam, Lotte main store and Jamsil, and Hyundai Trade Centum City. Valentino operates stores in Shinsegae main store and Galleria East, Saint Laurent in Shinsegae main store and Galleria East, and Bottega Veneta in Shinsegae main store, Shinsegae Centum City, and Galleria East, with more than two locations in each.

◆Department stores compete to attract luxury brands= The department store industry is also focusing on expanding luxury stores to strengthen their luxury competitiveness, and this trend is expected to become more pronounced. The luxury sales growth rate in the department store sector is in double digits annually. Especially recently, while sales in other sectors have declined due to a rapid increase in COVID-19 cases, luxury sales continue to grow.

Having the three major luxury brands?Herm?s, Chanel, and Louis Vuitton?guarantees sales, so department stores are concentrating efforts to secure these brands. Among the four major department stores, only seven locations carry all three major luxury brands.

Hyundai Department Store plans to open the largest department store in Seoul in Yeouido and is making efforts to attract the three major luxury brands there. Lotte Department Store converted the first floor of its main store last year from cosmetics to luxury stores, creating a premium store, and plans to apply premium stores to major locations such as Jamsil and Busan main stores. Shinsegae Department Store has introduced Herm?s in all 14 branches and plans to focus on expanding Chanel and Louis Vuitton stores this year.

Hong Hee-jung, senior researcher of Beauty & Fashion at Euromonitor International Korea, said, "Korea's luxury goods market shows steady growth across all areas including luxury clothing, bags, and watches, driven by the broad luxury consumption of Korean consumers. In the past, demand was mainly for traditional luxury brands like Louis Vuitton, Prada, and Chanel, but recently, demand for affordable or accessible luxury brands such as Karl Lagerfeld and Tom Ford is increasing, especially among young consumers and the middle class."

He added, "The outlook for the Korean luxury market is expected to continue steady growth led by luxury purchases from diverse consumer groups, similar to previous years. While offline stores like department stores have been the main approach for luxury brands to reach consumers, in the future, promotion and sales of luxury products through TV home shopping, social media, and online channels will also become more prominent."

This content was produced with the assistance of AI translation services.