By Kwon Mee-yoo
Luxury brands enjoy immense popularity and make huge profits in Korea, but they become stingy when it comes to contributing to society.
According to the Financial Supervisory Service, many luxury brands did not donate a cent in Korea as of the 2010 fiscal year.
Swatch Group Korea made 120 billion won that year, but donated zero. The situation is similar for Stuttgart Sports Cars, which marked 99 billion won in sales, Honda Korea (199 billion won) and Jaguar Land Rover Korea (124 billion won). Most of the profits are sent back to head offices.
Swatch Korea Group is composed of various watch brands from Swatch to Omega, Rado, Longines, Tissot and Calvin Klein.
"Each brand has its own headquarters and the Swatch Korea Group is just an association of various brands. So there is no CSR program offered by the group and each brand operates social contributions which are not seen in the data," a Swatch spokeswoman said.
Stuttgart Sports Cars, the importer of Porche here, said though they don't make donations or have a corporate social responsibility (CSR) program it supports Porche Club Korea, an organization of Porche drivers.
Gucci Korea, which achieved sales of over 273 billion won but returned only 37 million won to society, said it is preparing a CSR program focusing on providing scholarships to students in need from April. “The launch of a CSR program shows our gratitude for Korean customers and a sign of sustainable growth within the local community. It is going to be a long-term project and we will make contributions steadily,” a Gucci spokesman said.
Other companies are expanding their CSR programs.
BMW Korea, currently the No. 1 imported car brand in Korea, gave 886 million won from its 1.9 trillion won from sales in 2010, into their charity program.
The firm also established the BMW Korea Future Fund, a charitable foundation to help the less-privileged. Toyota Korea donated 487 million won, despite its 12 billion won deficit in 2010. The firm donated to the Korea Green Foundation and operated traffic safety programs for children.
Among luxury brands, Louis Vuitton is leading in terms of contributions. It turned over 427 billion won in 2010 and donated 59 million won. Though the ratio is tiny, Louis Vuitton said it will increase its CSR.
It is in partnership with welfare organization SOS Children's Village Korea and runs various programs such as building libraries and therapy rooms, increasing donations to nearly 200 million won.
"We will volunteer and take a walking tour of the country this year," a Louis Vuitton spokeswoman said.
Though the programs are not directly related to Louis Vuitton products, the company said it is a part of their motto of investing in the future and children.
Civic organizations have urged the luxury brands to offer more CSR projects.
"Many brands rake in money from Korean customers, but they are miserly in contributing to local society and give the profits to their headquarters," an official of Consumers Korea said. "They should make bigger donations to Korea, instead of sponging of Korean customers."