"Buying in China Is a Loss" "Saved 550,000 Won on Van Cleef Necklace in Korea"...Foreign Luxury Shoppers Flock In

Department Stores See Influx of Foreign Shoppers in Luxury Halls

Exchange Rates and Pricing Policies Drive Luxury Shopping Boom

"It's the same brand and the same model, but it's cheaper in Korea."

Liu Yang (34), a Chinese tourist who recently visited Korea to celebrate her wedding anniversary, purchased the Van Cleef & Arpels Vintage Alhambra necklace—a high jewelry piece she had long admired—as an anniversary gift during her trip. In China, this item sells for 33,200 yuan (approximately 7.35 million won as of the exchange rate on May 27), but in Korea it is priced at 6.8 million won, making it more than 500,000 won cheaper. With the addition of department store gift certificate promotions for foreign customers, the effective price felt even lower.

Yonhap News Agency

Due to the depreciation of the won, the domestic prices of certain luxury and high jewelry products have become lower than in other countries, fueling increased luxury spending among foreign tourists. Differences in exchange rates and brand pricing policies by country have widened price gaps for some products, resulting in a growing trend of foreigners purchasing these items directly in Korea.

According to the department store industry on June 1, some luxury brand products are priced lower in Korea than in Japan or China. For example, the Cartier watch "Baignoire" small yellow gold model is sold domestically for 34.9 million won, compared to 3,735,600 yen in Japan (about 35.16 million won, based on the May 27 exchange rate). Bulgari's "Divas' Dream" necklace is also priced at 3.93 million won in Korea—about 500,000 won cheaper than the Chinese price (around 4.47 million won).

Industry insiders attribute the increased appeal of purchasing luxury goods in Korea to the recent weakening of the won. While duty-free shops adjust prices in real time to the won-dollar exchange rate, department stores typically fix the won-denominated prices set by brands for a certain period, so exchange rate changes may not be immediately reflected. As a result, when the won depreciates as it has recently, Chinese and Japanese consumers perceive department store prices in Korea as relatively more affordable in their local currencies. Coupled with promotions such as gift certificates for foreigners, credit card benefits, and tax refunds (VAT refunds), the actual purchase price for foreign customers drops even further, according to department store officials.

A department store representative said, "Before COVID-19, Chinese customers accounted for 80-90% of our foreign clientele; recently, this figure is around 50%. With the global expansion of interest in K-culture, the nationalities of foreign customers have become much more diverse, including Southeast Asia, the Middle East, the United States, and Europe."

In fact, the three major department stores have reported a significant increase in foreign sales in their luxury and high jewelry categories. At Lotte Department Store, sales of luxury goods to foreigners at the flagship Sogong branch rose by 360% year-on-year (from April 1 to May 26). Luxury jewelry sales to foreigners also grew by 50% during the same period.

A Lotte Department Store spokesperson stated, "With the exchange rate effect drawing more foreign visitors to Korea, sales at luxury boutiques with price competitiveness due to the exchange rate have surged."

During the same period, the share of foreign luxury sales at Shinsegae Department Store's flagship branch increased by 214.4% year-on-year, while luxury jewelry sales grew by 111.6%. At The Hyundai Seoul, the growth in foreign sales was 121.4% in the luxury category and 200.1% in high jewelry during the same period.

Industry experts see these changes as the result of a combination of recent exchange rate fluctuations and differences in brand pricing policies by country. Luxury brands set their prices by reflecting local exchange rates, taxes, logistics, and distribution costs. Since price hikes are implemented at different times in each country, there can be temporary periods when certain countries enjoy stronger price competitiveness. In particular, luxury brands tend to be priced higher in China, which has led to increased demand for purchases in Korea. This is due to the relatively heavy tax burden on imported luxury goods in China, and because global brands classify China as a high-consumption market and apply premium pricing strategies to high jewelry and watches. As a result, some brands' prices in China are more than 10% higher than in Korea.

Additionally, the growing popularity of K-content has helped expand tourism demand. An industry source explained, "Foreign tourists used to concentrate on urban destinations like Myeongdong, Bukchon, and Gyeongbokgung, but recently tourism routes have spread to areas such as Jamsil and Seokchon Lake. Content development in cooperation with the Korea Tourism Organization and seasonal tourism demand are now intersecting, drawing more foreign visitors to Lotte Mall and department stores for shopping."

As a result, department stores are ramping up efforts to attract VIP foreign customers. Major department stores are strengthening services for foreigners, such as interpretation and exclusive promotions. Lotte Department Store operates ongoing promotions offering Lotte gift certificates to foreign customers and provides one-stop tax refund services and AI interpretation. Shinsegae Department Store has installed AI interpreters at its flagship and Gangnam stores, which are frequented by foreigners, so that customers can receive guidance in their own language.

An industry official said, "Not every product is cheaper in Korea, but some high jewelry items do have a price advantage. As exchange rates and tourism demand recover in tandem, luxury consumption among foreign customers is also on the rise."

This content was produced with the assistance of AI translation services.