Demand for luxury goods increased despite higher retail prices
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Demand for luxury goods is continuing to grow in South Korea, despite price hikes and the Covid-19 pandemic.
Chanel, a high-end fashion house, has already raised prices in the market twice this year.
The French luxury brand raised the price of the Classic Flap Bag Medium from 8.64 million won (US$7,600) to 9.71 million won, and the price of the Classic Flap Bag Large from 9.42 million won to 10.49 million won on Thursday. Prices of other products, including Boy Chanel, also rose by a similar rate.
Despite the increases, customers are flocking to Chanel boutiques at department stores throughout the country, lining up ahead of opening hours.
While some customers complain about a constant rise in prices, the popularity of luxury goods continues to grow.
Between May 1 and June 29, sales of luxury goods at Lotte Department Store jumped by 37 percent compared to last year. Sales of luxury goods at Hyundai and Shinsegae Department Stores rose by 54.1 percent and 38.8 percent, respectively.
“Prices increases for already expensive products give off the impression of rarity and something that only a few can afford, which eventually boosts demand,” said Lee Eun-hee, a consumer studies professor at Inha University.
“Customers are willing to spend more to buy them.
“Ownership of luxury goods is seen as a competition among many to demonstrate the ability of an individual, a means to justify discrimination among people,” Lee warned.
Questions & Answers
Q.Which specific Chanel products saw price increases in South Korea?
Which specific Chanel products saw price increases in South Korea?
The Classic Flap Bag Medium and the Classic Flap Bag Large both had their prices raised. Other products, including the Boy Chanel, also experienced similar price hikes by the French luxury brand.
Q.How much did luxury goods sales increase at Lotte Department Store between May and June?
How much did luxury goods sales increase at Lotte Department Store between May and June?
Sales of luxury goods at Lotte Department Store increased by 37 percent between May 1 and June 29, when compared to the same period last year. This demonstrates continued strong demand.
Q.What reason did a professor give for the increased demand despite higher prices?
What reason did a professor give for the increased demand despite higher prices?
Lee Eun-hee, a consumer studies professor, stated that price increases for expensive products create an impression of rarity and exclusivity. This boosts demand as customers are willing to spend more, viewing ownership as a competitive demonstration of ability.