|Customers flock to the Chanel store in a Lotte Department Store in Seoul in May 2020 after a rumor spread that the French luxury brand would increase prices for its products from between 7 to 17 percent. Korea Times file|
By Kim Jae-heun
Chanel, one of Koreans' favorite luxury fashion brands, has seen its status diminishing in recent months, due to too many people owning its bags and other items, according to industry analysts, Thursday.
In the past, not many people owned Chanel items. Its products were so expensive that most people would not dare to pay the prices being asked for them. However, the average income of people in Korea has gone up somewhat during the last decade and, in particular, the ongoing COVID-19 pandemic has helped them save a bit of money that they otherwise would have spent on traveling abroad, which they are now using to purchase luxury products.
In particular, young customers seem to have no qualms about spending thousands of dollars on a luxury item anymore. Some see Chanel bags as an investment asset because the luxury firm has been raising the price for its products quite often, so owners could potentially charge higher resale prices.
This situation is leading people to flock to Chanel boutiques in the country every time a rumor spreads online that the French fashion house has been preparing to hike its prices again. In 2021, Chanel increased the prices for its fashion items four times. None of its signature "Classic" handbag models are priced lower than 10 million won ($8,343) each.
However, there are signs now that Chanel's products are becoming less desirable than they were before. The price of its most popular "Classic Medium Flap Bag" on the local resale market dropped by 1 to 2 million won recently. It was traded for an average of 14 million won until early January on the online resale market, Kreme, but now the price has declined to the 11-million-won range.
"A luxury good is a luxury good when only small number of people own it. When everyone has a Chanel bag in their hands, people will no longer want it so badly," an industry official at a local luxury firm said. "Scarcity is of utmost importance for luxury goods. That is why Hermes is only selling its signature Birkin bags to a limited number of VIP customers."
|Chanel's Classic Medium Flap Bag / Screenshot from Chanel's official website|
There has been an oversupply of Chanel bags on the resale market. More than 70 percent of the available Chanel bags here have been purchased by resellers from department stores and Chanel boutiques, a local department store official said.
"Because there are so many Chanel bags available on online resale platforms, the brand's luxury image has gotten tainted. Chanel recently decided not to sell its products to resellers who visit its stores too often or buy up all the luxury items at once, but that has proven ineffective," a major department store official added.
Chanel Korea said that it could not comment on the issue.