Korea rises as test bed for global luxury brands

South Korea is becoming a test bed for global high-end brands such as Balenciaga, Valentino, IWC and Breitling. The world's top luxury brands, previously focused on fashion items and bags in the Korean market, are expanding their range of goods to cosmetics, watches, fragrances and even food in a bid to lure high-end customers.

Luxury fashion house Balenciaga will launch its new sports shoes line Paris Sneakers in Korea on March 25, which will be the first release in the world. “The global headquarters in Paris has picked Korea as the first market of the shoe line, based on the rapid growth of luxury fashion industry of the country,” an official at Balenciaga said.

Italian fashion house Valentino launched a pop-up store of its cosmetic and perfume brand Valentino Beauty in the trendy Hannam-dong district of Seoul on March 15. Valentino Beauty also entered the online gift service of Kakao Talk, Korea’s top mobile messenger, on March 21. Additionally, French luxury fashion brand Christian Dior opened Dior Beauty Online Boutique in Korea last month with its cosmetic and fragrance lines.

Other global luxury brands are also selecting Korea as the first Asian market on which to test their products or new service. Swiss watchmaking titan IWC Schaffhausen opened its café Big Pilot Bar by IWC & Center Coffee in Lotte Department Store in the center of Seoul last July. It was the watchmaker's second luxury watch-themed café in the world, after opening its first in Switzerland. Also, the US menswear brand John Varvatos opened its first Asia-based retail shop in Galleria Department Store, the largest upmarket department store in Korea, last November.   

Like IWC, some luxury brands are testing their new business in Korea with a combination of retail and food culture. Swiss watchmaker Breitling opened its largest boutique store in Hannam-dong last month. The two-story, 750 square-meter store consists of its watch shop, café and its first restaurant, Breitling Kitchen. Italian luxury fashion house Gucci will open its fourth Gucci Osteria outpost on March 28 within its flagship store in Itaewon, Seoul, which is known for cosmopolitan dining and nightlife. The new restaurant chains are only in Florence, Los Angeles and Tokyo.  

“Korea is growing as Asia’s test bed for luxury brands as the Japanese market has reached maturity. The new luxury products in Japan are not as well-performing as before due to the huge secondhand market in the country,” a department store industry source said.

Korea’s luxury goods market is the seventh-largest in the world, worth around $14.2 billion annually, according to global market research firm Euromonitor. Korea's online shopping market is growing by 20% a year, quickly absorbing global new fashion trends.

Write to Yoo-Chung Roh at yjroh@hankyung.com
Jihyun Kim edited this article.