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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 someone deeply entrenched in the world of luxury fashion and a seasoned enthusiast of high-end brands, I bring forth my comprehensive understanding of the dynamics shaping the industry. My insights are not just gleaned from casual observation but are rooted in a wealth of firsthand experience and a continuous pursuit of knowledge in this realm.
Now, delving into the article on Chanel's pricing strategy and customer service in Korea, let's dissect the key concepts and shed light on the various aspects at play:
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Chanel's Pricing Disparities Across Asia:
- The article highlights that Korean consumers are paying more for Chanel handbags compared to consumers in other Asian countries. The Classic Flap Bag's medium size, a coveted item, is priced at $9,825 in Korea, with significant increases in 2021. This information is crucial, indicating a notable pricing strategy variance in different regions.
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Price Hikes in 2021:
- Chanel raised the price for the Classic Flap Bag twice in 2021, first in July and then again in November, resulting in an overall increase of 30.1 percent during that period. Such rapid and substantial price hikes, as mentioned in the article, have sparked concern and dissatisfaction among consumers.
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Lack of Concrete Pricing Standards:
- The article points out that there is no concrete standard regarding how Chanel fixes prices for its products in each country. This lack of transparency in pricing methodology adds an element of mystery to Chanel's pricing strategy, leaving consumers questioning the rationale behind such increases.
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Chanel Korea's Response:
- Chanel's Korean branch claims to adhere to the pricing policy set by its headquarters. However, this statement does little to address the concerns raised by consumers about the substantial price hikes within a short span.
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Customer Dissatisfaction and Frustration:
- The article quotes a 32-year-old office worker expressing frustration over the seemingly arbitrary price increases. Additionally, there is dissatisfaction with how Chanel's customer service operates in Korea, including staff not providing information on restocking, a policy of not sharing information over the phone, and lengthy wait times to enter boutiques.
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Comparison with Other Countries:
- A comparison is drawn with the customer experience in France, where customers reportedly don't have to wait to enter stores, and there's a more transparent system for purchasing items that are out of stock.
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Speculation on Chanel's Customer Service Tactics:
- There's a suggestion that Chanel might be leveraging the scarcity perception of luxury items in Korea to heighten consumer desire. This speculation raises questions about the brand's customer service tactics and their impact on consumer behavior.
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Chanel Korea's Silence on Customer Service and Pricing Policies:
- When approached for comment, Chanel Korea declined to provide any insights into its customer service and pricing policies, adding an air of mystery and leaving consumers without official clarification.
In summary, the article paints a picture of a complex interplay between pricing strategies, customer service practices, and consumer sentiments within the luxury fashion landscape, particularly in the context of Chanel's operations in Korea.
