Louis Vuitton transforming Seoul’s Jamsugyo Bridge into an outdoor runway shows South Korea rising as a promising market for luxury brands. The Asian country has been getting significant investment thanks to free trade agreements with the European Union.
South Korea’s growth in the spending power of its citizens is also a driving force for the luxury market. A report by Euromonitor International stated that the luxury goods market in South Korea is projected to grow at a compound annual growth rate (CAGR) of 6.2% from 2020 to 2025. Moreover, investment bank Morgan Stanley said the country’s expenditure on personal luxury goods grew by 24% in 2022. It reached $16.8 Billion, equal to about $325 per capita.
South Korea saw a crazed demand for luxury handbags, jewelry, and clothes since the COVID-19 pandemic. High-end brands, like Italy’s Only The Brave (OTB Group), Thom Browne, and Burberry are entering the market. This signifies a new phase of growth in South Korea’s luxury goods market after it opened the doors to luxury imports in the late 1980s.
But it will not be easy for the luxury brands. The luxury retail industry, which includes a variety of local and international players, in the Asian country is very much competitive. South Korea, in recent years, has seen an increase in the number of luxury pop-up stores and concept stores, catering to the growing demand for unique and exclusive shopping experiences.
The demand is attributed toSouth Korean culture, K-pop, and Korean dramas for having a significant influence on fashion and beauty trends across the world. It continues to drive demand.