Chanel shunned by customers after 2nd price hike of 2022
Customers flock to Chanel's boutique at Lotte Department Store in Seoul prior to the brand's price hike in May 2020. Korea Times file
By Kim Jae-heun
More and more Koreans are turning away from Chanel, as it has lost consumer trust following a series of price hikes over the past two years, according to industry analysts Friday. After the French luxury brand was found to have been charging higher prices for its handbags and other merchandise in Korea than in other Asian countries, more people have stopped visiting its stores.
On Thursday, Chanel increased prices by an average of 5 percent, the second price hike of this year after raising prices in January. In 2021, the company lifted prices in September and November.
“This is ridiculous. Chanel just raised the prices a months ago ― how can they do it again so quickly? It has not been giving us clear explanations, and only luxury companies have been increasing prices so often,” a 34-year-old office worker surnamed Yoo said.
Chanel Korea said it had to adjust its prices to cope with increasing raw material costs and manufacturing expenses as well as fluctuating exchange rates.
Chanel's poor customer service is also discouraging people from shopping at its stores. There is an allegation that Chanel has been stockpiling its popular items until the price hike.
“I've visited Chanel boutiques in Seoul a number of times to buy a handbag, but it was never there. I happened to stop by at a store on Thursday and it was there, just 350,000 won ($288.90) more expensive,” another office worker surnamed Kim said. “I am going to look for the same bag on a resale market because prices there are adjusted according to the supply and demand.”
Chanel bags have been cheaper in local resale markets recently due to an increase in supply. Resellers have been flocking to Chanel boutiques here every time rumors spread online that the French luxury brand will raise its prices, which have often turned out to be true.
They waited three to four hours and swept up all the steady and best-selling items. This led to an oversupply of Chanel handbags and accessories in online resale markets, and last year Chanel limited handbag purchases to one per person per visit.
An industry official working at a local luxury firm hinted that Chanel increased its prices abruptly to keep its products' premium fees high in the resale market.
“After the French luxury firm heard its products' prices were falling in the local resale market, it decided to raise the price of its products and limit their supply,” the official said.