Foreigners spent more than three times as much on luxury goods at each of South Korea’s top three department stores in the first two months of 2024 as they did in the same period the year before, Lotte, Shinsegae, and Hyundai department stores said on Sunday.

This is a remarkable growth rate considering that the combined luxury sales growth of Korean and foreign shoppers remained in the low 10 percent range during the same period. Shinsegae and Hyundai department stores broke records in overall luxury sales and foreign customers’ luxury sales during the first two months of 2024.

The reason for the surge in luxury shopping by foreigners at Korean department stores is attributed to the country emerging as a crucial market among overseas luxury brands. According to Morgan Stanley, Koreans recorded the highest per capita spending on luxury goods worldwide at $325 in 2022, surpassing the United States ($280) and Japan ($210). Luxury brands are increasingly looking to launch new products in Korea to increase their presence in the market.

“Korea is increasingly important in the Asian luxury market, leading to the introduction of a wide variety of products, including items that are first introduced or exclusively launched in the country,” a Shinsegae Department Store official said.

Pop-up stores operated by major department stores also attract the attention of both Korean and international luxury customers. Reports show about 30 percent of luxury sales at Shinsegae Gangnam’s The Stage and Lotte Department Store’s The Crown at the Avenuel Jamsil branch come from new customers.

The increasing involvement of Korean idols and actors as brand ambassadors for luxury companies is also contributing to the growth of luxury sales at the department stores. Many customers associate specific luxury brands with Korean stars such as BLACKPINK’s Jennie, G-Dragon, Kim Go-eun, and NewJeans’ Danielle. Consequently, luxury goods purchased in Korea are perceived to be more trustworthy as genuine products and this perception is strengthened as the risk of purchasing counterfeit luxury goods from China, which are increasing in sophistication, increases.

The nationalities of foreign customers purchasing luxury goods at Korean department stores are becoming increasingly diverse. the nationalities of foreign customers visiting the luxury section of Galleria in Apgujeong, Seoul, were predominantly Chinese, followed by Thais and Americans, in February 2024.

The weakening of the Korean won against the U.S. dollar is also cited as a factor driving foreigners to purchase luxury goods in Korea, with the value of the won against the greenback decreasing by 18 percent to 1,344 won from 1,135 won in March 2019. If luxury goods are priced uniformly in the global luxury market, purchasing them in Korea could be relatively advantageous.

By Park Chang-young and Minu Kim

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]