(x) I just wanted to use this pic bc their faces are hilarious lol
SEOUL, South Korea — No-one in fashion would dispute the importance of Asia’s fourth largest economy. The numbers simply speak for themselves. But outside fashion’s inner sanctum, there is a sense that the value placed on this nimble nation is somehow disproportionately high. So much that it seems like the world’s fashion leaders are watching the Korean market through rose-tinted lenses.
Seen next to the numbers pumped out by fashion in Japan and China, Korea doesn’t stack up to its nearest Asian neighbours by any tangible measure. In terms of growth, sales or reliable spending figures, it doesn’t even come close and it probably never will. Yet in spite of its relatively small size and a recent economic slowdown, Korea has infiltrated the fashion industry’s 'A League' of Asian markets.
When confronted with this apparent paradox, a common explanation in fashion capitals is the vacuous riposte: “It’s all about the Koreans still, don’t you know?” For those focused on the bottom line, however, there is a more enlightened explanation. It is that the Korean market’s intangible assets are boosting its value above any tangible number found on a financial spreadsheet.
Among these intangible assets, the premium attached to ‘Brand Korea’ is arguably the biggest contributor. According to Futurebrand’s 2014-2015 Country Brand Index, Korea ranked third among Asian nations, surpassed only by Japan and Singapore. More tellingly perhaps, Korea's national brand ranked in the global top three for future potential.
Kingmaker Rather than King
Over the past decade, the country has been positioned at the most lucrative of crossroads where fashion, music, entertainment and celebrity collide to form a nebulous cool factor.
The business links between these creative industries have grown especially strong in recent years, too. With LVMH’s L Capital fund investing in YG Entertainment Inc (the manager of Korean ‘idol’ musicians like Taeyang, G-Dragon, Sandara and CL) and with YG in turn partnering with Cheil Industries to create a fashion brand called Nonagon, things have come full circle.
“We’re heavily influencing the Chinese market which is what’s driving the global high-end market,” said the editor-in-chief of the Korean edition of GQ magazine, Lee Choong-Keol. “Brands are giving an eye to Korean actors, actresses and singers, partly to attract Chinese consumers. Fashion brands based in Paris or Milan now see the Korean fashion industry as a key entry point for that.”
“Korea is a pivotal point as a [regional] test market because it responds sensitively to new trends. It’s also a huge market with its own trend-savvy consumers [so] the global fashion industry recognizes Seoul as a must-visit city,” he added.
Korea may not be king but the cool factor of its national brand, combined with its clout as a source for stylish products and popular culture, makes it a regional kingmaker of sorts.
There is no doubt that the influence of Hallyu style, K-pop culture and the Korean TV and cinema wave have boosted the appeal of Korea’s fashion market among Asian and Western consumers alike but some fashion leaders believe the West has become a bit too preoccupied with this narrow, singular narrative.
“Actresses like Jun Ji-hyun and the troika of big Korean actors — Lee Min-ho, Lee Jong-suk and Kim Soo-hyun — they’re all important and they deserve respect,” said Inhae Yeo, a journalist for Vogue Korea who also leads successful London-based consulting firm Oikonomos, which serves as a bridge between international fashion companies and partners in Korea. “But what I really want to highlight is that there is a group of very talented fashion professionals now in Korea and it is their influence that is growing more and more around the world too,” she continued.
Brokering access, relationships and deals for clients like Hermès and the British Fashion Council, Yeo has watched the demand for her services grow considerably in recent years and believes that the maturation of Korea’s fashion business-to-business sector has been a key driver.
According to Daniel Shin, the marketing director of Kaya Media Corporation, which publishes of the Korean editions of Harper's Bazaar and Esquire, this has been bolstered by a change in the business culture. "The Korean workplace used to be all about ‘sago-bangshik,’ which is an unofficial code of manners around respecting peers and doing as you're told by your superiors. But this has recently evolved into a more dynamic work environment where self-expression is valued," he said.
Design Prowess at Dizzying Speeds
The rise of Korean fashion designers — both at home and abroad — has certainly been an important thread weaving the market tighter together. The enthusiasm felt for Juun J in Paris, Kye in New York and Eudon Choi and J JS Lee in London seems to have eclipsed that of the earlier globetrotting generation of Lie Sang Bong, Park Choonmoo and Woo Young Mi. And in Korea itself, cool young brands like Push Button, Steve J & Yoni P and Beyond Closet are making waves of their own.
From the edgier collections on the catwalks of Seoul Fashion Week to the dizzying array of local labels occupying Seoul’s chaotic Doosan Tower (known locally as “Doota”), Korean brands are fast becoming a force to be reckoned with throughout the Asia-Pacific region.
“Indonesia, which is only second to China for us, is growing at a fast rate [in terms of exports],” said Park Yeon-Joo, the director of the Council of Fashion Designers of Korea. “[It’s] the same for Thailand. And Singapore recently suggested doing a Korean designer pop-up store at a large shopping mall there.”
In spite of the language barrier, popular fashion blogs like Uzine and Purplebrain on Naver, Korea’s leading internet portal, and its microblogging service Me2day, has a sizeable sum of followers across Asia. There is also a growing call for Korean fashion e-tailers like Wizwid.com and Wconcept.co.kr to start operating internationally. Online fashion has been particularly strong thanks to Korea’s position as the most connected country in the world with lightning-speed Internet, wireless and mobile networks.
Some of the more avid, fashion-forward followers of Korean style across Asia are increasingly influenced by insiders. Korean models such as Lee Sung-Kyung, Jang Yoon-Ju and Irene Kim each have around a half million Instagram followers, and bloggers like Pro Fashional Man and Hong Suk-Woo help curate content for Korea’s booming menswear market.
But experts like Yeo believe that these are just the most visible links in a long chain making the Korean fashion market stronger. “You know, my generation didn't have the ‘whole package’ when we were entering the fashion world. Now Korea has world-class stylists, buyers, photographers, editors, brand identity designers and so on. They all really get it and they want to make a difference.”
Old Guard Pushing New Innovations
One crucial development has been the evolution of Korea’s family-run chaebols [conglomerates] which have dominated fashion, electronics and heavy industry since the end of Korean War. The fashion divisions are now led by a younger generation of highly competitive executives, including Chung Yoo-Kyung of Shinsegae, Lee Seo-Hyun of Samsung Fashion and Lee Mee-Kyung of CJ Group.
“The third generation of the chaebols have been educated globally and had unprecedented access to international business. The point is how all of this melts into their perspective and is then applied to suit the local business culture,” said Yeo.
Thanks to the formation of new business units and multi-brand boutique empires under their watch, Korea’s market is now more dynamic and differentiated. Shinsegae-owned Boon the Shop and Samsung-owned 10 Corso Como Seoul are two of several in Korea with very strong buyer edits.
“To me, the multi-label boutiques joining forces with department stores, becoming this new 'store in store' format, was so weird – but this is what works in Korea. I used to be concerned that the big players and the conglomerates would use exclusivity rights to only distribute in their own retail outlets, but I’m not any more. Things are changing,” Yeo said.
LF Corp/LG Fashion has become the latest to join the fold through the repositioning of its multi-label boutique Raum. Other conglomerates operating in the sector are Hanwha Galleria and AK Plaza, which acquired the independent multi-label boutique Koon in 2011. Hyundai Department Store Group, another chaebol, got in on the action a few years ago by acquiring Handsome Corp, which owns multi-label boutique chain Space Mue.
“Global brands are working with us more and more, developing exclusive items targeted for refined Korean consumers, as a way to tap into the wider Asian fashion market,” says Chung Hwa-Kyung, the vice president of Shinsegae’s Boon The Shop, which celebrates its 15th anniversary this year and has been something of a brand incubator during that time, introducing once unfamiliar brands like Dries Van Noten and Comme des Garcons to Korean consumers.
“Back then, we had to continuously travel to New York, London, Paris and Milan to discover brands but now things have reversed. The brands are coming to us,” said Chung.
Urban Tastes for Super-sized Cities
Known locally as ‘Sudogwon’, the Seoul Capital Area is the second biggest metropolitan area in the world. With over 25 million people packed into Seoul proper, Incheon and Gyeonggi-do, it represents about half the country’s total population and accounts for the vast majority of luxury goods sold in Korea.
The number of multimillionaires in the city itself (those with net assets of £10 million or more) has almost doubled from 2410 a decade ago to 4410 today, according a report by New World Wealth.
No wonder Chanel chose this mega-city for the location of its cruise show next week. The brand has six boutiques spread across the city’s many department stores including Hyundai, Lotte, Shinsegae and Galleria (which was its first in 1997) and three more in the cities of Busan and Daegu.
“The choice of Seoul follows on from our trips to Singapore and Dubai where we presented our cruise collections the past two years,” says Bruno Pavlovsky, Chanel’s president of fashion. “It is a market that is an inspiration, a symbol of energy and modernity [and] Korean customers have sophisticated tastes and style. They appreciate the Chanel brand and are very faithful to it.”
In addition to Seoul’s traditional shopping districts of Apgujeong and Cheongdam in Gangnam, where virtually every global fashion brand is present in several locations, and Myeongdong, there are new fashion areas of the city emerging like Yeonnam, Itaewon and Hongdae, an artistic quarter full of eclectic small boutiques.
“Things are quickly spreading from the Seoul metropolitan area to other regions where there are super-sized shopping malls opening. Also, many brands are opening new stores in satellite cities,” said Chung.
With a metro population of nearly 8 million, Busan is Korea’s second largest city. Daegu, with around 3 million people, is less developed but also has multiple large-scale shopping malls as do Ulsan and Gwangju. The southern island of Jeju is important because it attracts many foreign visitors and duty free shoppers from Asia, as it is designated as a visa-free transfer zone.
Last year, Incheon International Airport outside Seoul generated duty free sales of $2 billion, which The Moodie Report deemed a world-record performance in the 67-year history of the airport duty free industry. Travel retail is expected to receive a further boost thanks to the strength of Korea’s cosmetics and beauty brands, and the country’s reputation as a popular destination for cosmetic surgery around Asia.
A More Competitive, Polarized Market
A decade ago, South Korea’s economy was hitting growth rates of more than 5 percent per year, but, in more recent years, GDP hovers around 3 percent, prompting weaker consumer spending than in the past. Nevertheless, Korea remains one of the strongest economies in the region and one of the wealthiest countries in the world.
Despite recent challenges, the long-term trajectory for Korea’s fashion market has been buoyant and there are still many opportunities. According to Euromonitor International, the size of the country’s overall apparel and footwear market has grown from $23.5 billion to $27.8 billion in the past five years. During the same period, the size of the designer category has soared from $2.7 billion to $4.6 billion.
“Apparel and footwear continues to be a hotpot of activity in South Korea, with the price polarization trend intensifying. Fast fashion brands are a rising trend as they are value for money. On the other hand, luxury goods continue to show strong growth regardless of ongoing price increases,” says Euromonitor research analyst Minji Kim.
Oh Sunhee, head of a fashion consultancy called Edit, agreed: “Recently, the mid-market is pretty much a catastrophe in Korea. High-end luxury and low priced basics as well as unique emerging designers are the categories that are surviving.”
Korean and Asian apparel giants like E.Land Group, Giordano International and ABC-Mart are also key competitors in the fast-fashion and affordable segments of the market.
“The tech-savvy Korean consumer is constantly updating her trends through Instagram and pursuing communities on Pinterest, acquiring a lot of information there,” said Ryu Soon-Kyung, senior vice president at Cheil Industries and creative director of Beaker, a multi-brand store in Seoul stocking niche brands like Astrid Andersen and Officine Generale while acting as an arbiter of cool.
“She buys her basic items from low-priced, quality-focused brands like Uniqlo, often on her mobile device, and is excited about new brands found at concept stores like 10 Corso Como, rather than the more famous designer brands.”
So what of hyperbolic headlines claiming that some Koreans are turning their backs on luxury and are more interested in discreet non-designer products?
“Yes, maybe, designer fashion will see a decline in sales growth [but] many Korean consumers now buy directly from global e-commerce websites when they’re not satisfied locally,” said Yeo of Oikonomos.
“On the other hand, there are brand new independent retailers opening in districts once dominated by the big players. And do you know what? They’re facing down fierce competition. That’s pretty exciting, don’t you think?”
Source: Business of Fashion
Have you adopted any Korean fashion styles or items, Omona? What are your favorite looks/designers from Seoul Fashion Week? I still really love PUSHBUTTON's bomb pop print they did a few years ago.