SEOUL • Chinese visitors to South Korea are buying less from global luxury mainstays like Louis Vuitton and Chanel in favour of cheaper home-grown brands, as young, independent travellers make up a bigger share of tourists.
Lured by the "Korean Wave" of culture exports, from soap operas and K-pop music to food and fashion, price-conscious younger Chinese visitors are seeking a more authentic and less expensive shopping experience.
South Korea trails only Thailand as an overseas destination for Chinese travellers, whose heavy retail spending has helped make South Korea the world's largest duty-free shopping market.
The emphasis on value will put further pressure on global luxury retailers already grappling with slowing sales in China after years of growth, as a government crackdown on graft and lavish spending bites.
"You can buy those big brands everywhere, and it is actually cheaper to buy those brands in other countries compared to the prices in South Korea," said 21-year-old Zhu Xin, who was shopping at the Stylenanda store in the popular Seoul neighbourhood of Hongdae.
"Now that we are here, we should buy local brands," she said.
Average prices of best-selling items from global luxury brands are lower in South Korea than in China, but higher than in Europe, Singapore and Dubai, according to HSBC data.
At downtown Seoul's duty-free shops, LG's Whoo and Amorepa- cific's Sulwhasoo cosmetics were the top-selling brands last year, overtaking Louis Vuitton, Chanel and Cartier, store data shows.
"This doesn't necessarily imply that luxury retailers have to launch cheaper stuff but it does necessarily imply that they have to be more relevant at every price point," said Mr Erwan Rambourg, an analyst at HSBC in Hong Kong.
The number of Chinese tourists to South Korea dipped 2.3 per cent last year to about six million due to the deadly Middle East respiratory syndrome (Mers) outbreak.
However, South Korea expects a record eight million Chinese visitors this year.
Chinese tourists to South Korea are getting younger: The share of those in their 20s and 30s rose to 46.1 per cent last year, from 40.9 per cent in 2013, according to the government-run Korea Culture and Tourism Institute.
While older Chinese tourists typically travel in groups, Chinese millennials tend to travel independently and spend less on shopping.
"I use my mobile phone to research what products to buy in South Korea," said 20-year-old Chinese tourist Liu Yuting.
REUTERS
