South Korea: Luxury Brands' Attraction Declines

In the middle of last month, financial supervisory service, a market monitoring agency in South Korea, reported that due to the economic recession in South Korea, the South Korean market in 2012 luxury goods Sales generally fell, including Burberry Burberry, gucci Gucci and Ferragamo Ferragamo. However, research institutions Euromonitor International, Euromonitor International and Bain & Co Bain both said South Korea's Asian position was still very important even if luxury sales slowed.

In the fiscal year ended March 31, 2013, burberry Group PLC (brby. L) Burberry's Korean sales fell 5.3% to won 228.1 billion, or about US $202.3 million, while its net profit plummeted by 35.1% to 16.8 billion won, while its net profit fell by 25.6% in 2011. According to data, burberry Group PLC (brby. L) Burberry Group PLC's revenue in Asia Pacific region increased by 14% to 745.3 million in fy2013, of which about 90% came from retail revenue. Burberry Burberry said Hong Kong and Mainland China had double-digit growth in fiscal 2013, while South Korea was weak.

In the previous fiscal year, gucci group's sales in Korea decreased by 4.5% to won 282.6 billion, with operating profit and net profit plummeting by 34.8% and 43% respectively. In 2011, Gucci's sales in Korea doubled, but fell back to the previous level in 2012. Italian leather manufacturer Salvatore Ferragamo S.p.A. (MTA: sfer) Ferragamo's net profit fell 12.8% in 2012, although its sales in South Korea rose slightly by 1.2% to won 98.4 billion. Salvatore Ferragamo S.p.A. (MTA: sfer) Ferragamo's revenue in the Asia Pacific region increased by 17.5% in fiscal year 2012 to 420.3 million euro. Like the Korean market, Ferragamo Ferragamo in Japan only had single digit sales growth.

Prada's net profit increased by 10.8% in Korea's Prada market in fiscal year 2012, while the net profit of Prada increased by 10.8% in 2011. As of January 31, 2013, prada Spa (HK: 1913) had net sales of EUR 3.297 billion, an increase of 29% over the previous year, of which sales in the Asia Pacific region increased by 33%, mostly due to the contribution of Greater China.

Many people in South Korea said that due to the sluggish operation of Korean stores, Bally's shopping malls had been closed down for a long time, and many people even said that due to the sluggish economy of Korean stores, many people even said that they had withdrawn from the luxury market for a long time. Industry insiders say the downturn will continue for a short time. South Korean consumers' interest is shifting from Gucci and Louis Vuitton, according to Euromonitor International, a 13 year old Louis Vuitton department store Hyundai Department Store in Busan, South Korea's second-largest city, in January this year. Instead of Omega omega watches, Minji Kim said a 13 year old Louis Vuitton department store in Busan, South Korea's second-largest city, was closed in January.

Shopping malls such as Shinsegae, Hyundai and Lotte have always been Korean luxury goods This year's discount season is earlier than ever. At the same time, family discounts, which used to be offered only to VIP customers and employees, are beginning to reach a wider audience.

E-commerce and luxury goods are also slowing down in South Korea. TV shopping has always been a very important shopping channel for middle-class housewives in South Korea since the 1990s, and e-commerce is now sought after by young people. The decline in tourism consumption is mainly due to the fact that a large number of Japanese tourists are confined to China due to the depreciation of the yen. In the same period of this year, more than half of the tourists from Japan and South Korea accounted for more than half of the total number of tourists from Japan and China, which accounted for more than half of the total number of tourists from Japan and China. Although Korean luxury market is driven by Chinese tourists, it still has higher taxes than Europe.

Euromonitor International expects 2013 Korea luxury goods market It will rise slightly to 7.77 trillion won, about 6.96 billion US dollars, on the basis of 7.25 trillion won in 2012, with a compound growth rate of 6.4% in the next five years from 2012 to 2017. Federica levato, manager of Bain & Co Bain Milan, said the growth of South Korea's luxury goods market was slowing down in 2012 and the first few months of 2013 due to the decline in tourism consumption and political competition between North and South Korea. However, he did not give specific data, but said the growth was at a "very low" level.