THE KOREA LUXURY MARKET 2012. 11. 1.
Luxury
Luxury is the opposite of vulgar. - Coco Chanel
Why Luxury Business? Family Business Originality + Savoir-Faire Created by hands Custom-made products - Economic Growth/World Peace - Woman Emancipation - Influx of capital - Introduction of Marketing Industrial Business Very high break-even point But, very HIGH-PROFIT business High value of brand asset
Why purchase Luxury? Luxury for myself - Quality / Multi-sensory - Hedonism / Aesthetic pleasure Luxury for others - Social necessity - Ostentation : Objects, Art, Beauty Source: The Luxury Strategy
럭셔리산업의분야 Leather Goods Fashion Watch & Jewelry Cosmetic & fragrance Hospitality Others: Retail, Automobile, Table Wear, Art, Education, Health Care.
Luxury Added value? Added Values Functional Needs Figure (Founder, Designer ) Heritage Legitimacy Brand (logo) Story
Louis Vuitton Louis Vuitton Heritage Trunk Asnières Museum Art of Travel Spirit of Travel
Rarity Management Ingredients, Components Techno-rarity, Innovations Limited editions, Order-made Distribution-based Rarity Information-based Rarity natural virtual Source: The Luxury Strategy
Hermes
Importance of Visual Signature Value of Recognition Means to show-off Sign of Brand Legitimacy Timeless Factor Brand logo protection against counterfeits to survive!
Chanel
Chanel
Christian Dior
Christian Dior
Burberry
Burberry s zebra
Luxury Marketing Paradox Auto Manufacturing Craftsmanship Detailed Information Multi Promotional Activities MASS MARKET Low Cost Low Price No Sophisticated Copy Strategy Low Promotional Activities LUXURY MARKET High Cost High Price Diverse Distribution Limited Distribution Source: Luxury Brand Management
Values of Luxury Consuming Practical & functional Symbolic Experiential Exchangeable (investment) Holistic Multi-Sensorial Experience
Rule of Thumb Forget about the economies of scale! Selective Rare, but manageable Brand identity! Proactive Different, but consistent Long term planning
The Korea Luxury Market
If I bring my business to Brazil. I would want to know: The Market Overview Where to sell Whom to work with How to communicate Whom to sell
Market Overview
Share of Luxury Market Local purchase Overseas purchase Duty-free (Travel Retail)
Luxury Market History 1980 s : Travel Retail & License markets 1990 s : Agency => Direct Management 2000 s : Matured market
Change of Interest Appearance Experience
Priority of purchase Hand bag Shoes Fashion Jewelry & Watch Automobile Watch Fashion Shoes Seource: SLBI
Trend in Marketing Smart & Healing Anti-aging and Skincare Private Gym and Personal Training Gourmet event with chef or winemaker Modern Art / Design Men s Market VIP Service
Changes in Environment I am luxury, too! Expansion to hospitality Diversity in merchandise in duty-free stores Diversity in shopping channel Power game of department stores and brands Growth of digital luxury & internet business
Duty-Free Market Koreans travelling overseas: $400 limit Foreigners travelling to Korea: No limit Domestic duty free in Cheju Japanese > Chinese > Russian
Local vendors Parallel Market Boutiques in middle & small cities Product purchased in Seoul to sell with premium Flagship stores, department stores Overseas vendors Japanese, Chinese vendors Price difference between Japan/China and Korea Duty-free stores, department stores
Wedding Market Watch & Jewelry Handbag Home appliances Clothing Cosmetics Furniture Kitchenware
Local License Market Local Production with luxury brand Products satisfying local customers needs Royalty business
Second-hand Market Top-tier brands: LV, Hermes, Chanel, Cartier Leather goods, shoes, watch, clothing Korean, Japanese tourist On-line websites
Counterfeit Market Despite of legal actions, still found in many places.
Where to Sell
Free-Standing Stores
Department Stores
Duty-Free Stores
Shinsegae & Lotte Outlets
Multi-Brand Stores Rather under developed World-famous designer brands Boon the shop (Shinsegae International) 10 Corso Como (Cheil Mojik)
Whom to work with
Agency Local Business Wearfun fashion & Accessories M&B Inc. - Watch Keumbi Cosmetics & Perfume Department Stores The Galleria, Hyundai, etc. Travel Retail Bluebell Korea (LVMH)
How to communicate
Printed Media Newspaper Monthly International license & local fashion & beauty Membership Department stores Men s Street paper
Digital Media Power blogger Facebook Twitter Websites of magazines On-line magazines
Communications Advertisement Advertorial, Editorial & Pictorial Bus shelter Outdoor banners Short films on trendy beauty shop Cable TV programs Product Placement Celebrity endorsement
Promotion & Event Fashion shows Beauty class Jewelry class Invitation of Craftsmen Art & Cultural events VIP Gala
Prada
Gucci
Celebrity Marketing
The Customers
The Korean Rich Progressive Specialist The new rich Wealth Mgnt Enterpreneur Digital Conservative The traditional rich Inherit analogue Life Style digital Source: VIP Marketing 54
Department Stores VIP Marketing $10,000 purchase /year VIP lounge service Free parking Bank, Credit card, Insurance, etc. $1 b cash Gifts Invitation to cultural events Chef / Winemaker dinner Golf event
What they want? 사회경제체제에서, 노동조직에서의부의분배방식과수량의다름에따라생긴인간집단이계급이다. 그들이원하는건단 2 가지 - 불평등과차별! 군림하고지배할수없다면차라리철저히차별받기원한다. 그것이그들의순리이자상식이다. - In a TV drama Secret Garden Inequality & Discrimination 56
Preferred Values of VIP Exclusivity I am the only one who owns it I am the person who have special taste Recognition Remember and recognize me I deserve inequality & discrimination 57
It s Korea!
Social Contribution Programs According to the public opinion, some luxury brands started social contribution programs Louis Vuitton Gucci Volkswagen Ermenegildo Zenga Toyota
Louis Vuitton
Gucci
Toyota
Volkswagon
감사합니다 ~! Obrigado~! Thank you~!