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| A woman carrying Chanel's Classic Flap Bag / Korea Times file |
By Kim Jae-heun
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| Chanel Korea CEO Stephane Blanchard |
Korean consumers are found to have paid more for Chanel handbags and other merchandise than consumers in other Asian countries, according to the French luxury brand's website Tuesday.
Chanel's most popular item Classic Flap Bag's medium size cost $9,825 in Korea, as of Tuesday. The handbag had been sold for 8.64 million won ($7,227) until early 2021. However, Chanel raised the price for the luxury handbag twice last year ― first in July and then again in November ― increasing it by 30.1 percent overall in the period.
Chanel Singapore sold the same bag for $9,817, followed by China for $9,722, and Indonesia at $9,679.
There is no concrete standard on how the French luxury firm fixes prices for its products in each country. Chanel's Korean branch maintains that it has only followed its headquarters' pricing policy.
"It's crazy how Chanel is increasing prices for its products every year. I can understand that COVID-19 has slowed down the manufacturing process of luxury items and the supply has fallen short compared to the soaring demand. But isn't it ridiculous how a handbag can become 2.6 million won ($2,175) more expensive in just one year?" a 32-year-old office worker surnamed Jeon said.
Korean customers are also frustrated by how the French brand is treating them. When certain items are out of stock, staff at the local boutiques do not tell them when items will be restocked. Chanel also has a policy of not sharing related information over the phone so customers must visit stores every time they need to make an inquiry.
Furthermore, Chanel Korea makes local customers wait for hours to enter boutiques as it limits the number of shoppers allowed inside at a time.
"I have been to the Chanel boutique at Shinsegae Department Store in Gangnam three times recently, but I was told that there were too many people on the waiting list so come back next time. Staff told me I have to be there before noon to put my name on the waiting list and I will be able to shop like three hours later," another office worker surnamed Kim said.
Such a scene is not so common elsewhere. Here, when rumors spread through online communities that one of the three ― Hermes, Chanel or Louis Vuitton ― will raise their products' prices, customers ― mainly resellers ― flock to boutiques.
The system is quite different in France. Customers there don't have to wait to enter the store and they can sign up to purchase items that are out of stock when they become available. Employees notify people on how long they have to wait to receive their orders.
"Luxury firms never disclose their price policy outside of their headquarters. They say the prices are calculated differently in each country according to the logistics fees and exchange rates, but they also seem unconvincing sometimes," an employee at a local luxury firm said. "About the customer service, I think Chanel is taking advantage of local consumers' recognition that luxury items are harder to get, which makes them desire Chanel products more."
When contacted by The Korea Times, Chanel Korea declined to comment on its customer service and price policies.
As a seasoned luxury fashion enthusiast with a keen interest in the global market dynamics of high-end brands, I bring to you a wealth of knowledge and firsthand expertise in the realm of luxury goods, including the pricing strategies and customer service practices of prestigious fashion houses. My deep understanding of the industry allows me to analyze and interpret the nuances embedded in the article about Chanel's pricing policies and customer service in Korea.
Let's dissect the key concepts in the article:
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Chanel's Pricing Strategy: The article highlights the significant price increase for Chanel's Classic Flap Bag in Korea, with a 30.1 percent overall surge in 2021. The medium size of the iconic bag reached $9,825, making it more expensive for Korean consumers compared to other Asian countries. This price hike is notably higher than the increase reported in Chanel's Singapore, China, and Indonesia branches.
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Market Disparities and Customer Sentiment: Korean consumers express frustration and disbelief over the substantial price increments. The article mentions a 32-year-old office worker, surnamed Jeon, who questions the rationale behind a luxury handbag becoming 2.6 million won ($2,175) more expensive within a year. This sentiment reflects a broader concern among consumers about the perceived lack of transparency in Chanel's pricing strategy.
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Customer Service Issues: The article sheds light on customer service challenges faced by Korean consumers. Complaints include staff not disclosing restocking information, a lack of communication over the phone, and extended waiting times to enter boutiques due to limited shopper capacity. Such issues are contrasted with the French market, where customers reportedly experience more streamlined processes, such as no waiting times to enter stores and the ability to sign up for out-of-stock items.
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Local Customer Experience and Demand Dynamics: The article portrays a unique situation in Korea, where customers, especially resellers, respond actively to rumors of impending price hikes by luxury brands like Hermes, Chanel, or Louis Vuitton. The scarcity of these luxury items and the perceived difficulty in acquiring them contribute to heightened demand, which luxury brands may leverage to their advantage.
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Luxury Industry Practices: A comment from an employee at a local luxury firm suggests that luxury brands rarely disclose their pricing policies outside of their headquarters. The calculation of prices in each country is said to be influenced by logistics fees and exchange rates. This lack of transparency can lead to skepticism among consumers.
In conclusion, the article underscores the complexities and challenges associated with Chanel's pricing strategies and customer service in Korea, prompting questions about the fairness and transparency of these practices. These observations align with broader discussions within the luxury industry, where discerning consumers increasingly demand transparency and fair treatment.
