Kwak Ji-yoon, a 42-year-old South Korean housewife, used to be a loyal customer of Louis Vuitton but she does not buy LV bags any more. Instead, she recently bought a $1,000 white metal-studded handbag made by Alexander Wang.
"I already have five Louis Vuitton bags. When you take a subway, you see three or four Louis Vuitton bags in just one carriage. People no longer say 'wow' when you carry an LV bag," she says. "But my friends ask where I bought my new handbag because the design is not common. And it is much more affordable than traditional luxury bags."
Ms Kwak is not alone. The €8.3 billion South Korean luxury market, Asia's third largest behind China and Japan, has become a tougher place for global fashion houses to compete as young consumers turn to more accessible "contemporary brands" amid waning popularity of expensive premium brands such as Gucci, Louis Vuitton, Ferragamo and Burberry, and with domestic consumption mired in a prolonged slump.
"The luxury market here is going through an important shift," says Song Ji-hye, a partner at Bain & Company. "Some of the famous luxury brands are struggling to keep up with trends, with demand for them replaced by more accessible contemporary brands, while ultra high-end brands such as Chanel and Hermès still enjoy strong sales."
Louis Vuitton was once the most popular luxury brand in South Korea, and its handbags garnered the nickname of "three-second bags" because of their ubiquitous appearances.
But the market has become more challenging in recent years, with increasingly sophisticated shoppers looking for new brands with distinctive designs that help them stand out from the crowd.
Fashion-savvy young Koreans have also become more price-sensitive as sales channels such as online shopping and outlets allow them to seek bargains rather than pay full price.
"We often see younger luxury buyers, who have become the market's main growth drivers, looking for trendier brands such as Givenchy or Celine rather than classic designs of Chanel or Louis Vuitton," says Bang Jae-won, the chief merchandiser at Lotte Department Store. "They like to mix and match outfits such as wearing H&M clothes but carrying a Hermès bag. And most of them prefer value consumption through online shopping or outlets."