Seoul, March 17 (BNA): With coronavirus restrictions on travel and duty-free shopping easing, South Koreans are driving a boom in luxury goods at home that has caused Chanel to block nearly a third of potential shoppers to prevent bulk buyers from getting 10,000 bags worth of bags. dollars for resale with price margins of 20% or more.
The storied French fashion and luxury company told Reuters it has seen a slide in traffic to its South Korean stores since it began looking for customers it thought might stock just to move to other stores in the resale market, Reuters reported.
“We were able to identify them (wholesale buyers) after analyzing buying patterns. Since this policy was implemented, traffic in our stores has decreased by 30%. It did not reveal exactly how these customers were considered potential wholesale buyers, and privately owned companies do not disclose numbers,” Chanel told Reuters in a statement. Sales by country.
The Chanel strategy, which has been implemented since July of last year, came with increasing global demand for luxury goods after the worst of the Corona virus pandemic. South Korea is the world’s seventh largest luxury goods market according to Euromonitor, and the research firm estimates that it was one of only two of the seven largest markets by revenue – the other being China – to grow sales last year from 2019 levels.
Despite this, the display in brands like Chanel is tightly controlled, maintaining exclusivity and enhancing attractiveness with no online shopping option other than cosmetics, perfume and some small accessories. Such is the delicacy in downtown Seoul where long queues form before dawn outside supermarkets as shoppers prepare for what’s known as an “open run” – a brisk race to the doors of Chanel at opening time.
“I arrived … at 5.30 am for the open run and was notified that there were more than 30 people ahead,” a shopper told Reuters in front of a Chanel store in Seoul. Speaking on condition of anonymity due to privacy concerns, he said that by the time he entered the store – about 10 hours later – the item he wanted had been sold.
Reflecting such intense demand in the resale market, Chanel’s classic medium-slot bag sold for 13.5 million won (US$11,031) — 20% more than the standard retail price — in January on KREAM, a platform that offers everything From sneakers to technology and luxury goods from tech giant Naver Corp.
KREAM, an acronym for ‘Kicks Rule Everything Around Me’, was launched in 2020. She told Reuters its monthly transactions topped 100 billion won in December, and said South Korea’s resale market was worth more than 1 trillion won — roughly 820. Million dollars – even by the most conservative estimates.
While resale platforms like KREAM offer a range of brands, Chanel, like Swiss watchmaker Rolex, is a particularly desirable brand due to its standing among South Korean couples as one of the most popular wedding gifts, and frequently increasing prices of its most popular handbags Iconic.
Chanel raised prices for some handbags, accessories and seasonal ready-to-wear earlier this month in Asia and Europe, including by 5% in South Korea — where it raised prices for the fifth time in nine months, according to Chanel Korea.
In conjunction with its screening of wholesale buyers, Chanel said it has implemented a “queue management system”: customers are required to provide a contact number and reason for visiting the store so that they are notified via text when they are able to enter the boutique.
Brand experts and consumers are divided over the impact of the new buying style on Chanel.
“Consumers are voluntarily doing free ads for Chanel — camping outside (boutiques), taking open tours, and posting their experiences on social media,” said Lee Eun Hee, professor of consumer sciences at Inha University.
“I think all of these phenomena helped Chanel attract younger customers and make a good chunk of money from it.”
However, some consumers say long queues and queues put them off.
“I just stopped buying a Chanel product a long time ago,” said a Seoul native in her 30s, who declined to be named due to privacy concerns.
“It’s very difficult to buy one, with usually about 300 people on the waiting list, and when it’s my turn, there is no product left. This really bothers me and I don’t want to be in the center of this craziness.”
Don’t give up anytime soon they are wholesale buyers and sellers.
Some of the vendors, who spoke on condition of anonymity due to the sensitivity of the matter, told Reuters they were renting a “production line” for a fee of up to $125 a day to queue or enter stores on their behalf.
One seller in his 30s told Reuters that he resells his purchases at a profit usually over 20% – and it can be more profitable when the inventory level is low.
He said he recently sold a Chanel flap card holder on second-hand market app Karrot for nearly 1 million won, 40% more than the retail price — five minutes after it went on sale.
MI