"Honey, Prices Will Rise Again After Chuseok"... Luxury Brand Raises Prices 7 Times in 3 Years Only in Korea

Luxury Price Hikes: "Once a Year" Is a Thing of the Past

Global luxury brands have once again implemented 'multiple price increases' this year. Traditionally, the luxury industry raised product prices once a year, but in recent years, it has become standard practice to raise prices two to three times annually. Luxury brands claim that rising raw material costs and high exchange rates leave them with no other choice but to increase prices. However, critics argue that the frequency and scale of these hikes are excessive, even after accounting for the rise in gold prices and exchange rates.

According to industry sources on the 12th, luxury jewelry brand Bulgari is reportedly planning to raise prices after the Chuseok holiday. This comes just four months after it increased prices for jewelry and other products by an average of 7-10% in June. If the price hike goes ahead, Bulgari will have raised prices three times this year-in April, June, and now again.

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Bulgari is not the only brand to have raised prices more than twice this year. Cartier has increased prices three times (in February, May, and September), and luxury watch brand IWC has also raised prices three times (in March, June, and September).

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Other brands such as Boucheron (February, July), Van Cleef & Arpels (January, April), Tiffany (February, June), Damiani (February, July), Rolex (January, July), and TAG Heuer (January, July) have also implemented two price hikes within the year. The rate of increase has ranged from 5% to 10%.

Why Are Luxury Prices Rising So Frequently?

Luxury brands cite rising gold prices and high exchange rates-the main raw materials-as the reasons behind the price increases. According to the New York Mercantile Exchange, on the 1st (local time), the December gold futures price closed at $3,897.50 per ounce (about 5,458,000 won), marking an all-time high closing price. With the strong dollar trend continuing, the USD/KRW exchange rate has remained in the 1,400 won range over the past month.

However, some argue that the pace of price hikes by foreign brands is excessively fast, even after factoring in inflation, exchange rates, and gold prices. For example, Cartier, which has raised prices three times this year, increased prices by 6% in both February and May, and by another 2-5% last month. Even with a simple calculation, the cumulative increase amounts to 14-17%.

Some products have reportedly risen by nearly 20% this year alone. A domestic jewelry industry insider commented, "As consumer spending shifts from luxury bags and clothing to jewelry, the trend of multiple price hikes for luxury jewelry is intensifying." The insider added, "Domestic jewelry brands are also adjusting their prices to reflect the rise in gold prices, but they have no other choice but to consider consumer resistance levels."

"Koreans Buy Even at High Prices": The Impact of Consumer Demand

Lines of people lined up in front of the luxury brand sections at department stores in Seoul following news of luxury price increases. Photo by Yonhap News

Some observers suggest that Korean consumer demand for luxury goods is influencing these price hikes. According to Bluebell Group, an Asia-based retail specialist, 73% of Korean consumers said they are willing to purchase luxury brand products even if prices rise. Additionally, 76% of respondents view luxury goods as investment products, and 80% consider brand reputation important.

As a result, the domestic performance of overseas luxury brands has soared. Richemont Korea, the Korean subsidiary of Richemont Group-which owns Cartier and Van Cleef & Arpels-posted sales of 1.7952 trillion won for the last fiscal year (April 2024 to March 2025), up 19.6% from the previous year. Tiffany Korea and Bulgari Korea recorded sales of 378 billion won and 419.1 billion won respectively last year, representing increases of 7% and 23% year-on-year.

Do Luxury Goods Have Defects? The Cartier Durability Controversy

Capture of Cartier homepage

The problem is that even as prices rise, product defect controversies continue. On luxury online communities, there have been numerous posts claiming that "the durability of products purchased from Cartier is not what it used to be." Typical cases include a Love Bracelet that became discolored even though it was only stored after purchase, and a watch with a movement defect where the customer requested an exchange but was only offered a repair.

According to current consumer dispute resolution guidelines, defects occurring within six months of purchase are considered manufacturer defects and are eligible for exchange or refund. However, in the case of Cartier, customers are often asked to pay for repairs or must send the product to the French headquarters to determine if repair or exchange is possible. In response, consumers have said, "It makes no sense to worry about quality when the main reason for buying luxury goods is the brand value," and are reportedly considering filing a collective dispute mediation request.