As consumers increasingly seek affordable dul, luxury cosmetics have proven to be a permanent trend
Luxury cosmetics are becoming increasingly popular, and sales growth outperforms high-end fashion items such as handbags and clothing as the long-term economic downturn continues to affect consumer spending.
Sales figures for major department stores show that luxury cosmetics, including products from brands such as Prada, Hermes and Givenchy, have seen a significant increase in sales.
Last year, the cosmetics divisions of department stores at Lotte, Shinsegae and Hyundai recorded sales growth in the range of 16% to 24%, while luxury fashion sales increased by just 5% to 11%.
Lotte department stores saw an increase of around 20% in the premium cosmetics sector, while synthegae department stores reported an increase of 16.3%, while modern department stores increased by 24%. In comparison, their fashion sector saw only a small growth of around 5-12%. This contrasts with the 30% surge recorded in 2022.
This change in consumer behavior reflects a trend towards more affordable dul. Instead of buying expensive handbags and clothing, many consumers opt for small luxuries such as lipstick and eyeshadow.
“As the recession deepens, this trend towards ‘small luxury’ continues. Luxurious beauty brands are becoming a go-to option for many customers looking for a little snack during these challenging times,” said Min Da Haye, purchasing manager for the beauty department at Lotte Department Store.
Luxury brands are meeting the changing market by expanding into cosmetics. French luxury brand Louis Vuitton announced that it would debut a new beauty line this fall, marking the brand’s first venture into the cosmetics sector since its founding in 1854.
Details about the lineup and whether Louis Vuitton will open a standalone store in Korea are still wrapped, but the move reflects a wider trend in the luxury industry.
Despite a slight decline in global sales for LVMH Group, which owns Louis Vuitton, Dior and Fendi, the cosmetics segment rose 2% in 2024 from the previous year. Meanwhile, sales of fashion and leather products fell 3% over the same period.
Another high-end brand, Prada, also launched its cosmetics line in 2023, and then expanded its presence in Korea, opening a standalone store in Song Dong in Seoul in January.
Industry experts suggest that luxury brands are turning to cosmetics as a stable source of income amid the demand for luxury fashion.
“While our core luxury customer base remains stable, the fashion segment is affected by the recession. By expanding to cosmetics, these brands can ensure a more reliable revenue stream,” said a representative of the luxury brand.
yoohong@heraldcorp.com
