【South Korea】[Han Young-jin’s K-Jewelry Story①] Why Did Bernard Arnault Acquire Tiffany & Co.?

In 2021, Forbes ranked Bernard Arnault, the head of the world’s largest luxury conglomerate LVMH, as the third richest person globally. LVMH is a France-based multinational corporation and a conglomerate of global luxury brands such as Louis Vuitton, Givenchy, and Fendi.

Bernard Arnault acquired the American luxury jewelry company Tiffany & Co. for $15.8 billion in January 2021. This move reflects the LVMH group’s assessment of the jewelry market as an attractive sector with high growth potential.

According to Euromonitor, the size of the global jewelry market in 2020 reached approximately $282.8 billion (about 365 trillion won). The domestic Korean market is estimated to be worth 5.4 trillion won. (Source: Wolgok Jewelry Industry Research Institute)

While global brands like Tiffany, Cartier, and Boucheron continue their steep growth trajectory, what is the current state of the domestic Korean jewelry market? The manufacturing and distribution hub of Korean jewelry, which actively formed around Jongno in the 1970s, is now on a path of decline. The gold and silver shops once seen everywhere have now become places of memory.

Since the 2000s, overseas luxury jewelry brands like Tiffany, Chanel, and Cartier have dominated the domestic market. This is due to the influence of jewelry buyers turning their eyes to foreign luxury goods.

The rampant copying of luxury items by domestic companies, essentially cannibalizing their own industry, has hindered the growth of the Korean jewelry sector. Despite the initial difficulty, they should have focused on nurturing their own brands, investing in research and development (R&D), and marketing. However, jewelry designers took the easy path of copying. As a result, domestic jewelry has been stigmatized as so-called ‘counterfeits’ and its popularity has gradually declined.

Global luxury brands possess tradition, history, and excellent designs crafted by artisans. However, we must ponder whether consuming expensive luxury goods is truly rational.

K-Jewelry also harbors excellence and growth potential not inferior to that of luxury brands.

First, K-Jewelry possesses world-class craftsmanship. The value of jewelry is determined by the rarity and purity of gems and precious metals, as well as the craftsmanship that makes the jewelry stand out. Korea has outstanding artisans with remarkable dexterity who steadfastly persist in the field.

Second is the reliability of materials used in the Korean market. Over the past decade, the purity and content of gems and precious metals used domestically have reached world-class levels, thanks to market self-regulation efforts and policy support. The quality of materials used in domestic jewelry is on par with that of overseas luxury brands. K-Jewelry has the advantage of being able to handle excellent materials at reasonable costs.

We must create a foundation for domestic jewelry designers to grow so that world-class luxury brands like Tiffany, Cartier, and Boucheron can also be born in Korea. To foster them, various educational programs need to be developed. Furthermore, through exchanges and joint research with overseas jewelry designers, advanced technology and global design trends must be absorbed.

Additionally, policy support at the government level is essential. Korea has become a powerhouse in semiconductors and smartphones after going through the industrialization era, but it desperately needs new growth engines for a new era. That new industry will be K-Jewelry. Let’s look forward to the future of K-Jewelry shining on the global stage in 10 or 20 years.