For more than a decade, global luxury brands leaned on China and the United States as their primary engines of growth. But 2025 is reshuffling the map. With China’s premium goods market contracting at its sharpest pace in a decade and U.S. luxury demand softening under inflationary pressures, South Korea has emerged as one of the industry’s brightest spots.
Why South Korea Matters Now
South Korea isn’t a new market for luxury. It has long ranked among the world’s top spenders per capita. But what makes it stand out today is its resilience at a time when other markets are stalling.
- Big numbers: Louis Vuitton, Hermès, and Chanel posted nearly 10% growth in combined sales in Korea last year, reaching $3.3 billion.
- Tourism boost: Spending by visitors, mainly from China and Japan, hit a record ₩9.26 trillion ($6.6 billion) in 2024, up by a third, fueled in part by the weaker won (Korea Herald).
- Flagship expansions: LVMH’s Dior and Louis Vuitton are both planning maison-style flagships in Seoul’s Cheongdam district, with Dior’s revamp expected as early as 2027, complete with a permanent restaurant. Bulgari and Tiffany & Co. are also lining up major flagships in the same neighborhood.
At the same time, Richemont’s Vacheron Constantin opened a Seoul flagship in June 2024, blending horology with Korean culture through exhibitions and art collaborations. Hermès also relocated and expanded its Seoul flagship in August. The message is clear: brands are betting long-term.
Why the Shift Away From China
The context matters. In 2024, China’s luxury market shrank the most in 10 years, according to Bain, with consumers pulling back amid slower growth and shifting consumption abroad. Meanwhile, rising U.S. tariffs on European imports have forced brands to hike prices, pushing affluent buyers to shop overseas instead.
South Korea, by contrast, offers a mix of:
- High domestic appetite for prestige fashion and jewelry.
- Regional pull, attracting luxury tourists from China, Japan, and Southeast Asia.
- Stable infrastructure —with Seoul’s Cheongdam-dong increasingly seen as a global luxury capital.
The Catch: Not Everyone Wins
Not all brands are thriving equally. While Hermès bucked the trend with a 19.8% YoY sales jump in February 2025, other houses saw double-digit declines in card transactions, per Korean platform KED Aicel. Middle-class shoppers are tightening belts, while younger consumers experiment with independent and niche brands.
This highlights an important reality: Korea is polarized. Legacy icons are holding strong, but the “quiet luxury” boom is giving way to a more selective, values-driven consumption—where only the most relevant brands sustain momentum.
What It Means for Global Luxury
South Korea’s rise isn’t just a local story. It represents a strategic pivot for the global industry:
- A hedge against China’s volatility.
- A way to capture both domestic affluence and regional tourism flows.
- A testbed for blending culture, lifestyle, and luxury—from permanent restaurants inside maisons to art collaborations unique to Seoul.
In 2025, the question isn’t whether South Korea matters. It’s whether brands can sustain their momentum in a market that’s both deeply loyal and increasingly discerning.
