âIt all started because I loved shopping, and it was something for me to do,â Park said. “But the market has gone absolutely crazy over the year with so many dealers adding ridiculous premiums.”
In order to alleviate overheated demand and suppress resale, Chanel implemented a purchase limit in October: Customers in South Korea are only allowed to purchase one of the Classic Flap and Coco Handle bags per year. , as well as one of every item in the small leather goods category, said a spokesperson for Chanel, adding that the company is taking action locally because certain products are particularly in demand.
Sales of luxury brands in South Korea’s department stores continued to climb this year, up 45% in the first half of the year compared to the same period in 2020, according to a statement from the Commerce Ministry. Millennials and Gen Z – who hate to lag behind and want to live in the moment – are the biggest spenders, said Lee Eun-Hee, professor of consumer studies at Inha University. ‘Incheon.
‘We only live once’
âChanel satisfies millennials and Generation Z in many ways, as it gives them the pleasure of buying something that is rare, while also allowing them to make a profit from resale,â Lee said over the phone.
With house prices soaring in South Korea, people in their 20s and 30s may think they will never be able to afford a down payment on a home. Instead, they’ll spend the savings they have on things they can enjoy now.
âThey take the ‘you only live once’ mindset and splurge on luxury goods,â Lee said.
The average price of an apartment in Seoul more than doubled to 1.24 billion won ($ 1.47 million) in November, from 607 million won in May 2017, when President Moon Jae-in took over. its functions, according to KB Financial Group. This is a huge burden for Koreans in their 20s and 30s with an average monthly income of less than 3 million won.
Chanel is likely to continue raising prices next year, experts say. This year alone, the price of a typical average flap bag rose about 30% to 11.24 million won. Chanel takes into account changes in production and raw material costs, as well as fluctuations in exchange rates when adjusting prices, and the company makes sure that there are no excessive price differences. between different markets, the spokesperson said.
A small Chanel mini flap bag purchased in July 2017 cost 3,240,000 won. It now stands at 5,390,000 won, up 66%. During the same period, the Kospi index of South Korea’s stock market rose 25 percent.
Han Ji-min, who paid an additional 200,000 won to buy a leather wallet from Chanel through a dealer, is among the millennials who are not deterred by Chanel’s continued price hikes. On the contrary, she thinks it might be the safest investment she can make.
âI should have bought a Chanel bag a few years ago, rather than investing my money in stocks,â said Han, 30, who works for a law firm. “I would have made a lot more money with the bag.”
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