Global luxury brands such as Louis Vuitton and Prada saw their sales and net profit here surge over the past five years, buoyed by brisk sales irrespective of economic conditions.
Ten major luxury brands posted 1.85 trillion ($1.6 billion) in sales overall in Korea in 2011, marking 190 percent growth from 648.9 billion won in 2006, according to Chaebul.com, a website tracking Korean conglomerate owners.
Further, their net profit increased by more than 300 percent from 45.7 billion won in 2006 to 187 billion won in 2011.
Prada, the No. 3 player in Korea, recorded noteworthy growth ― from 27.1 billion won to 251.3 billion won in sales over the corresponding period.
Louis Vuitton, as the No. 1 in the market, reported about 300 percent growth to reap 497.4 billion won in sales last year. Gucci retained the second position with sales of 296 billion won and a growth rate of about 100 percent for the five years.
According to a 2011 report on the Korean luxury market by McKinsey & Company, the size of the luxury market in Korea has been on a constant rise for years, reaching $4.5 billion in 2010.
More than 45 percent of customers surveyed said last year that buying luxury goods was not a special event, compared to the 21 percent a year earlier.
The report also said spending on luxury goods accounted for 5 percent of household income, higher than the 4 percent of neighboring Japan.
It also pointed out that Korean customers are becoming more fastidious about luxury items as they become more common.
On another front, luxury goods brands have not been generous in making social contributions, a variety of data also showed.
The combined contributions to society by the 10 major brands stayed at about 1 billion won over the cited five years. The figure accounts for only 0.14 percent of their net profit.
By Kim Yon-se (
kys@heraldcorp.com)
