By Jane Han
Shoppers, brace yourselves for a new stage in luxury shopping. Once South Korea's free trade agreement with the European Union takes effect, your long-wished-for Guccis and Louis Vuittons are going to be more closely within your reach.
With the two sides announcing Monday that negotiations for the trade accord have been virtually concluded, luxury diggers are turning their attention to what matters to them most: premium goods and how cheaper they're going to get them.
The trade pact is set to roll back the 8- to 13-percent tariff currently levied on European bags, clothes, shoes and cosmetics imported here within the next three years, so industry experts say that retail prices should ebb down just as much.
Cost estimates vary depending on the product and brand, but rough calculations show that a Louis Vuitton Speedy 40, which now costs 970,000 won, will be about 100,000 won less, as would a pair of Salvatore Ferragamo shoes that typically cost an average of 500,000 won.
A Burberry trench coat priced at 1.8 million won now is likely to be lowered to 1.6 million won, while a Chanel bag that currently costs 4.5 million won may be priced at 3.7 million won, according to retail experts.
However, European labels fended off immediate expectations that prices would step down, as many of them claimed that they will not consider changing their pricing policy until getting an official notice regarding the Korea-EU FTA.
``It's far too early to be talking about price reductions when the trade deal hasn't even been signed yet,'' said one official at a European fashion and cosmetics brand, who asked not to be named.
But local firms are already bracing for fiercer competition, as they fear that marked down imported products are going to end up taking up a bigger piece of the domestic fashion and accessories market.
``We're either going to have to lower our prices even more or stir up some magical measures to counter the heightened competition,'' said a spokeswoman at a leading local leather goods brand.
The same goes for the auto industry, which is expected to see an influx of less expensive premium automobiles from Europe once South Korea's 8-percent duty slapped on European cars is phased out in three to five years.
A Mercedes Benz C-Class priced at 46.5 million won will now probably be lowered to 42.7 million won, while other cars such as BMWs and Volkswagens are expected to see similar price modifications.
Car makers, however, also warded off early hopes of discounts, as they claimed that many other factors are factored in to determine pricing.