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Chanel overtakes Louis Vuitton to claim top spot in Korea

The South Korean luxury market underwent a significant transformation as Chanel surpassed Louis Vuitton to claim the top spot. Chanel’s impressive sales of KRW1.7 trillion marked a milestone achievement.

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However, across the luxury market, a trend of slow growth continues, accompanied by a clear polarisation among luxury brands. Christian Dior saw remarkable growth, achieving the KRW1 trillion sales mark for the first time last year.

Consequently, the number of brands with sales exceeding 1 trillion won increased from 2 in 2022 to 3 last year.

The collective revenue of major four luxury brands including Louis Vuitton, Chanel, Christian Dior, Hermès reached KRW5.2 trillion in 2022, driven by retailers expanding standalone stores across various categories such as bags, menswear, and shoes.

Source: Celine

Moreover, Christian Dior, Celine, and Rimowa continue to demonstrate noticeable high growth rates, leading the market.

Celine’s sales grew more than sixfold since declaring direct entry into the market, while Rimowa also recorded an impressive growth rate of 77 percent.

On the other hand, a decline in sales is evident for watch and jewelry brands like Rolex and Bulgari.

Source: Dior

Overall sales dropped by 2 to 3 percent, attributed to subdued demand for wedding specials and a shift in consumer preferences towards lab-grown diamonds and smartwatches.

Also, Moncler Korea experienced a decline in operating profit for the first time.

Source: Rolex

Although Fendi Korea saw an increase in revenue, it faced an operating loss of KRW89 billion due to higher expenses in advertising and sales management.

Other brands like Valentino, Tod’s, and Tom Ford also witnessed sales declines ranging from 3 percent to 17 percent compared to the previous year.

SEE ALSO: Thriving Brunello Cucinelli sees 16 percent revenue growth in Asia in Q1

In response, brands are undergoing personnel restructuring at their Korean subsidiaries, replacing key personnel to explore new strategies.

Louis Vuitton Korea, Loro Piana, and Fendi Korea are prime examples. It raises questions about which brand will take the top spot in sales next year and whether the clear polarisation can be resolved.

This article is authored by the Luxury Business Group (LBG), which specialises in the luxury, retail and VIP sectors, and provides customised solutions encompassing business consulting, recruitment, and training. 

Revenue figures have been sourced from the Korean Financial Supervisory Service, a government agency.