Korea'S Luxury Market Is Ahead Of Expectations.

Despite a sharp decline in gross domestic product for the two consecutive quarter, South Korea has surprisingly survived the global economic crisis of 2008~2009.

The whole market is recovering rapidly in the middle of 2009, and South Korea is expected to become the first group to get rid of it.

Korea's luxury market is ahead of expectations.

Unlike the Japanese, European and American markets where luxury sales are either weak or atrophic, South Korea's demand for high-end design clothing and accessories is very strong.

During 2008~2009, the sales volume of Korean luxury goods department, the department store, rose by 16.7 percentage points.

This is the fastest growing country in the world after China.

According to their estimates of Korean luxury consumers' purchase behavior and their attitudes towards luxury goods, McKinsey believes that the Korean's love for luxury goods will continue.

McKinsey's research shows that the relentless driving force of the Korean luxury market is mainly influenced by two important "soft" factors: luxury and peer pressure.

South Korea is a "luxury friendly country" and they have such a culture.

For example, only 5% of South Korean respondents said they thought that buying luxury goods was a waste of money and felt guilty, while the proportion of other developed countries reached 10%~15%.

Show off luxury

Koreans are also more competitive than other countries.

Korean luxury consumers always chase fashion, and it seems normal to show their latest luxury to others.

45% of Japanese and 38% of Chinese believe that showing off their luxuries is a low quality performance, but only 22% of Koreans think so.

In McKinsey's survey, it was also found that 60%~70%'s respondents mentioned "wearing the material and spiritual value of luxury goods" to make them happy.

The continuous recognition of products and the convenience of distribution channels are another reason.

McKinsey's research confirms many interesting categories, consumers and channel trends, which all share a wave of rising luxury consumption in Korea.

Shoppers with 80%~90% said they would resume their luxury purchases.

With the signs of economic recovery becoming more apparent, McKinsey expects that consumers will be able to change their spending habits as soon as possible after the global economic crisis, rather than wait until later.

Sales of watches and jewellery doubled, fashion accessories sales rose 5%

In 2009, sales of luxury bags and shoes rose sharply (about 10%~30%), but sales of watches and jewellery almost increased by more than 1 times.

However, sales of fashion accessories have risen by less than 5%, and sales of some costumes are even less than that of 2008.

It is quite normal for Korean Buyers to go up rather than down.

For watches / jewellery, 19% of respondents said they had recently purchased expensive brand luxury goods.

New luxury consumer groups are emerging.

Rich women aged 40 and ~60 are the core markets of traditional luxury brands.

But as the economic burden is reduced, the mind is more open, and the desire to dress to express their desires, Korean young people, aged 20 and ~30, have become new buying groups for retailers.

In Lotte, a department store in Korea, a 20 year old ~30 year old customer accounted for 35% of the number of stores purchased in 2006. In 2009, the data rose to 44 percentage points.

This is a very exciting signal for retailers because younger buyers tend to spend most of their disposable money on high-end clothing and jewelry compared with those who are old.

Men are another emerging market.

Although women are still the main market for luxury goods, a fashion magazine reported that men's buyers rose by 29 percentage points, while women only increased 12 percentage points.

New luxury channels are maturing.

So far, department stores are still the main selling channels for luxury goods in South Korea, but some new channels, such as shopping centers and online shops, are also beginning to become lively.

It may not be surprising that the main chain stores in South Korea, the 3 major Korean department stores, which occupy 3/4 of luxury goods sales, Le Tian (Lotte), New World Department Store (Shinsegae) and modern (Hyundai) help to promote the development of these updated channels and expand their influence through diversification.

In the new world department store, the number of luxury brands abroad increased from less than 20 in early 2000 to 300 in 2009.

The increase of varieties also increased the competition among brands and changed the buying behavior of consumers.

E-commerce has also developed into a useful platform for marketing and communication.

Online shopping is quite new in Korea. This country is also one of the countries with more developed network links on the earth.

Luxury brands pour into the Korean market

McKinsey suggests that under the leadership of department stores, luxury brands must be able to adapt to diversified sales channels, from brand stores to online sales.

McKinsey said it is necessary to invest in a Korean website for Internet sales, but it is not enough.

Especially in the luxury industry, vision and detail are very important. The quality of the picture must be very high and the description of the product must be very clear.

Websites have increasingly become the primary channel for shoppers to get information about products and brands, so pay attention to the digital world like magazine advertisements and flagship stores.