Editor’s Note
As the holiday shopping season approaches, several major luxury brands have implemented price increases. This article examines the trend and its potential impact on consumers.
With Christmas and the year-end gift season just a month away, major luxury brands have once again increased their prices.
Brands such as Chanel, Bottega Veneta, Bvlgari, Tiffany, Vacheron Constantin, and Omega have all joined the price hike trend, which is expected to further burden consumers.
The Italian brand Bottega Veneta raised the domestic prices of some products starting on the 6th. Its flagship model, the ‘Large Andiamo’, increased by 14.5% from 11.36 million won to 13.01 million won. This marks the third price increase this year, following hikes in February and May.
The French brand Chanel raised the domestic prices of its ‘Chanel 25’ handbag line by an average of 9.3% on the 4th. The small bag rose from 9.07 million won to 9.92 million won, the medium bag from 9.70 million won to 10.73 million won, and the large bag from 10.88 million won to 11.77 million won, representing increases of 8-10% each. Backpacks also saw increases in the 4% range, with the medium size rising from 9.96 million won to 10.38 million won and the large size from 10.62 million won to 11.07 million won.
This is Chanel’s fifth price increase this year, following hikes in January (bags), March (cosmetics), June (bags & jewelry), and September (leather goods & shoes), solidifying a pattern of ‘quarterly increases’.
Luxury watch and jewelry brands have also joined the trend.
Bvlgari raised the domestic prices of its main lines, such as ‘Serpenti’ and ‘Divas’ Dream’, by an average of 3% on the 10th. This is the third increase this year alone.
Tiffany & Co. is considering an additional price increase this month, while Vacheron Constantin will raise the prices of all its domestic products by an average of 5% starting on the 15th.
Omega also adjusted the price of its flagship product, the ‘Seamaster Aqua Terra Shade’, from 9.90 million won to 10.40 million won starting on the 1st of this month.
As these ‘Nth round’ price increases by luxury brands continue, consumers are reacting by saying, “Luxury goods have become a dream again this Christmas.” The price hikes just before the holiday season, when gift demand is concentrated, are effectively seen as a ‘strategic adjustment’.
However, as a ripple effect of the sharp price increases, the ‘mint-grade’ (near-new pre-owned) luxury market is conversely booming.
Market research firm IMARC analyzed, “The global pre-owned luxury market is growing rapidly, with the Asian market, including South Korea, being particularly prominent.” In a survey by another firm, ReturnPro, 59% of U.S. consumers responded that “if luxury prices continue to rise, they would purchase pre-owned products.”
In reality, at ‘Kangkas Department Store’, Asia’s largest mint-grade specialty store located in Samseong-dong, Gangnam-gu, Seoul, not only domestic consumers but also foreign tourists are flocking, leading to long waiting lines.