[Reuters, Seoul, 17th]–In South Korea, overseas travel is restricted as a countermeasure against the new coronavirus infection, and the demand for branded products is heating up in Japan, probably because of the reaction that people can no longer enjoy shopping at duty-free shops.
Under these circumstances, French luxury brand Chanel announced in July last year that it would not sell products to customers who purchase in large quantities for resale. Resellers also hire part-time workers to line up in line at the store and try to get the products, and the battle is fierce.
Chanel explained to Reuters that he has been watching the movement of customers in South Korean stores since he started monitoring because he thought that there were customers hoarding goods just for resale. “As a result of our analysis of their purchase patterns, we were able to identify bulk buyers. Since implementing this policy, store visits have dropped by 30%,” he said.
The company hasn’t disclosed how it actually considered it a bulk purchaser or sales by country.
Global demand for branded products is expanding. According to research firm Euromonitor, South Korea in particular is in the top seven in terms of global brand sales, and only South Korea and China have top seven sales last year above 2019. ..
On the other hand, brand-name manufacturers such as Chanel strictly control the supply of products to maintain their value, and have adopted a mechanism in which only a small number of products such as cosmetics and perfumes can be purchased online. Therefore, in the center of Seoul, the capital of South Korea, there is a phenomenon called “open run” in which people who absolutely want to get products form a long line at the storefront from dawn and try to buy the products.
A customer lined up at a Chanel store in Seoul told Reuters, “I arrived at 5:30 in the morning, but there was already a line of about 30 people,” but I was finally able to enter the store nearly 10 hours later. Sometimes he revealed that the product he was looking for was sold out.
Inquiries in the resale market are increasing there. Chanel’s representative handbag “Medium Classic Flap Bag” was sold for 13.5 million won ($ 11,031) in January at the limited-edition resale site “KREAM” under the umbrella of a major Korean IT company Neighbor. This is usually more than 20% higher than the retail price.
Resale sites like KREAM offer a variety of brands for sale, but Chanel is particularly sought after alongside Swiss luxury watches such as Rolex. It is one of the most popular wedding gifts in South Korea, and the price of its flagship handbags is frequently raised.
According to Chanel Korea, the company raised prices for several handbags, accessories and seasonal clothing this month in Asia and Europe, up 5% in South Korea. This is the fifth price increase in South Korea in the last nine months.
Chanel, which monitors bulk purchases for resale, has also adopted a “matrix management system.” When the customer tells the order of arrival and the purpose of coming to the store, the available time for entering the store is sent by text message.
There are also criticisms of these commotions. Professor Lee Yun Hee of Inha University said, “Consumers are voluntarily running Chanel’s free ads. They spend the night outside (in the store), do an open run and share the experience on social media. I think all of these phenomena are helping Chanel attract younger customers and spend a fortune. “
Of course, some consumers are sick of the length of queues and waiting lists.
A woman in her thirties who lives in Seoul said, “I stopped buying Chanel products long ago. It’s normal for around 300 people to wait in line, and by the time I can enter the store, there are no more products left. That made me really unwilling to buy it, and I don’t want to be in such an eccentric turmoil. “
It’s the resellers who don’t give up on that. Several vendors have told Reuters that they are paying up to $ 125 a day to hire people to line up or shop instead.
A vendor in his thirties said that resale usually makes more than 20% profit, and low inventory makes it even better.
The vendor recently put up Chanel’s “flap card holder” on a second-hand goods trading site, offering a little less than 1 million won, which is 40% higher than the retail price, and explained that it sold in just five minutes.
(Reporters by Heekyong Yang and Silvia Aloisi)