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| Chanel's Classic flap bag / Korea Times file |
By Yoon Ja-young
French luxury brand Chanel raised its prices again. Now all of the Chanel bags in the "Classic Bag" category each come with a more than 10-million-won ($8,500) price tag.
Chanel raised the price of the small size "Chanel Classic Bag" by 17.8 percent to 10.52 million won, the medium size by 15.8 percent to 11.24 million won, and the large size bag by 15.3 percent to 12.1 million won, starting from Nov. 3. Chanel's Classic line is especially popular here as a gift for brides.
It is Chanel's third price hike this year, following hikes of between 2 and 5 percent in February and around 12 percent in July. With the hike in July, the price of the large size bag has surpassed the 10 million won mark for the first time, as its price was raised to 10.49 million won from 9.24 million won. Now, all bags in the Classic line cost more than 10 million won, except for the mini size ones, which are about as small as a wallet.
As there had already been rumors of a price hike, hundreds of shoppers had been lining up in the Chanel stores of major department stores from early morning to get the bag before the price increase was to take effect.
Chanel Korea said that it is a regular price change taking into account the cost of production and materials, as well as exchange rates.
There have been complaints in online forums that Chanel considers Korean consumers pushovers who continue to purchase the company's luxury goods. Chanel even started restricting the number of bags each customer can buy here, allowing only one bag per year for each customer, in the case of some popular items.
"They are controlling the supply. There is overheated demand here since consumers can't get a bag even if they have the money," said Lee Eun-hee, a professor of the Consumer Science Department of Inha University.
COVID-19 has aggravated the situation. "Previously, there were diverse channels for consumers to acquire luxury bags, but now they can only get them at luxury stores in the country," she said.
She also pointed to the broader customer base. "In the past, luxury brands were usually for older people. They would get just one or two items for their lifetimes, but now, the younger MZ generations are also consuming luxury brands," she said. The MZ Generation refers to both Millennials and Generation Z, those born between 1981 and 2005, who are approximately in their 20s and 30s at the present time.
While the MZ Generation are interested in luxury goods, it doesn't necessarily mean that all of them are wealthy.
"They also consider it an investment. They purchase, own and enjoy the luxury goods, but they also think they can sell them on the secondhand market if they need money. Even if they don't have much money, they can enjoy them as investments," she said.
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