Irene Kim, a 38-year-old South Korean who runs an employment agency, is an avid consumer of luxury products. A working mother of two, she is now sharing her passion for designer clothes with her children.
Kim, who lives in Dongtan, an industrial suburb south of Seoul, recently bought a Won780,000 ($560) silver necklace from Tiffany for her four-year-old daughter and a pair of Won380,000 Golden Goose shoes for her younger daughter, aged 18 months.
“I don’t want them to look shabby when we go out for a wedding, birthday party or a music concert,” said Kim. “If they can run around comfortably in these clothes and shoes, I don’t mind the price.”
She has recently bought several luxury items for her children, including a Moncler jacket and shirt, a Burberry dress and pants, and a Fendi gown and shoes.
As South Koreans become more affluent, the country with the lowest birth rate in the world, according to the World Bank, is seeing an increasing number of parents splurging on luxury goods for their smaller families.
“The country’s birth rate continues to fall, but its luxury market for children keeps growing,” said Lisa Hong, a beauty and fashion consultant at Euromonitor. “Koreans love to flex. They can’t stand it if they can’t do things that others do. Many families have only one child, so they choose the highest-end items for their kids, driving the age of first luxury consumption lower.”
The country is one of the world’s three fastest-growing markets for luxury children’s clothes in terms of per-capita spending, according to Hong, with a compound annual growth rate of more than 5 per cent in the past five years, behind only China and Turkey, according to Euromonitor.
It represents a bright spot for a luxury goods industry that this week reported a marked decline in sales for Gucci in the region and a 14 per cent fall in Asia excluding Japan sales for LVMH in the second quarter.
“Competition is severe in Korean society and people want to stand out. Luxury goods have become a good tool for this,” said Lee Jong-kyu, the chief of Etro Korea and former head of Dior Korea. “A Moncler winter jacket has become like a school uniform for teenagers.”
Department stores are rushing to open children’s luxury shops. Lotte, Shinsegae and Hyundai have reported double-digit growth in children’s luxury sales in 2023, despite a slowing economy and high inflation.
Hyundai and Shinsegae’s sales of luxury children’s labels surged 27 per cent and 15 per cent, respectively, last year. Lotte said sales of premium kids’ items, such as Bugaboo strollers and Stokke baby high chairs, jumped 25 per cent.
“Because of the low birth rate, the attention of parents, grandparents, uncles and aunts is focused on only one child in an extended family and they spend lavishly on the kid,” said a Hyundai spokesperson. “We will continue to expand our kids’ luxury shops as this trend is likely to continue.”
South Koreans account for about 10 per cent of global sales at top-end brands such as Prada, Moncler, Bottega Veneta and Burberry, according to a Morgan Stanley report in 2022. It is not uncommon in Seoul to see people camp out overnight outside department stores to be the first in line to buy a new item when they open.
Tiffany and Spanish fashion brand Loewe are opening new shops in the affluent Cheongdam neighbourhood in Seoul to take advantage of the luxury boom, while Swiss luxury watchmaker Richard Mille launched a revamped shop in the area this month.
Bank of Korea governor Rhee Chang-yong said in June that the country’s enthusiasm for designer goods was making it harder to curb inflation with monetary policy, as price elasticity was being undermined. He added that South Koreans showed “a rare tendency to covet a particular brand en masse when it catches on”.
Young adults, brought up on receiving pricey gifts and frustrated by high housing prices, have joined the country’s luxury boom. Brands have been targeting people in their 20s and 30s by tapping K-pop stars from BTS to Blackpink as their ambassadors. Luxury goods purchases by people in their 20s showed the strongest growth among all age groups in South Korea, according to a 2022 report from Lotte.
“Those luxury brands get imprinted in young people’s minds as the ads featuring K-pop idols make them crave luxury products,” said Euromonitor’s Hong, adding that the trend had also been fuelled by influencers on social media bragging about luxury shopping.
BY Eom, a businesswoman living in Jamsil, a wealthy neighbourhood in Seoul, is concerned about her 17-year-old daughter’s penchant for luxury items, with her grandparents having given her expensive items since she was young.
They recently bought her a pair of sneakers made by Asics in collaboration with Marc Jacobs, which cost Won800,000, for her birthday.
“I am worried that she may get too used to these luxury products and whether she can have a job later to afford this kind of high-end consumption,” said Eom.
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