Price increase, new policies and global inflation all play their roles in dissuading Koreans from buying Chanel products.
It came as no surprise when Chanel has been the talk of the town for the last two years. Frequent price rise and controversial policies have made Chanel the target for multiple, ongoing debates around the globe. Korea is where the brand is most disregarded.
Sharing with The Korean Times, a housewife surnamed Park (32 years old) in Seoul said that she was surprised not to have to see a line of people in fron of a Chanel store: “It was Monday afternoon when I went to the store. But still, I always had to wait at least two hours. It was the first time in recent years that I didn’t have to wait and could go into the store right away.”
Why is the brand losing its appeal?
Frequent price rise
A 34-year-old pharmacist surnamed Jeon said:
“Chanel bags are a dream item for many women in Korea. That is why they save up money to buy one or ask for one as a wedding present from their husbands. But this is only under the circumstance that the prices are affordable, at least to a certain level. Chanel has been raising the prices of its items by a million won every three to six months in recent years and there are not many who can deal with it.”
In January 2022, the series of Coco Handle bags increased from 4,300 USD to 4,800 USD for the mini size; 4,600 to 5,100 USD for the small size and 5,000 to 5,500 USD for the medium size.
In March of the same year, Chanel increased the prices of purses and handbags by an average of 5%. In November 2022, Chanel’s Classic Large Flap soared by 6% while the Mini Flap Bag rose by 7%. The accessories also went up by 7 – 8% depending on their models. The price change shows that Chanel increases the prices of their products three times a year, an powerful element that influences buyers’ purchase decisions.
Putting a limit on bag purchases
The “one bag per year” policy is another minus point in the eyes of the public. According to this policy, each customer can only by one Classic Flap Bag and one Coco Handle per year as a way to combat resellers who buy in bulk and later resell it with unimaginable prices.
Chanel is in a difficult relationship with Korean customers
Increasing inflation
A trend of living “on a budget” and reducing buying luxury items also takes a toll on Chanel. When the Korean government lifts the band on overseas travel, the people tend to pay for different forms of entertainment rather than using it on luxury brand items. Moreover, global inflation also means buyers are less likely to spend money on inessentials.
While Chanel still has a place among the lives of the wealthy, the brand is slowly losing its spot among the expense of the people. This begs the question, is Chanel targeting the super-rich?
Source: The Korean Times, Bloomberg, The Korean Herald
