SEOUL–Apparently it takes a lot to shock consumers in South Korea.
On Thursday afternoon, less than 48 hours after hundreds of North Korean shells rained down on South Korea’s Yeonpyeong Island, department stores here were bustling with shoppers searching for winter clothes. Lines formed outside Louis Vuitton boutiques. Other luxury stores were not necessarily packed, but definitely crowded.
According to a saleswoman in a Prada boutique located in a Shinsegae Department Store in eastern Seoul, aside from initial shock, surprise and nervousness immediately after Tuesday’s attacks, it has otherwise been business as usual: “Some people went to grocery stores to buy extra noodles,” she said. “Otherwise everything is normal.”
That’s likely to reassure fashion and luxury goods companies, who have been touting the potential of the fast-growing Korean market and its style-conscious citizens in recent years. Meanwhile Seoul is emerging as one of Asia’s most vibrant capitals with a lively fashion and arts scene. Last year, Prada’s much-hyped Transformer structure, created in collaboration with Rem Koolhaas, elevated Seoul’s profile even more.
Korea weathered the financial crisis surprisingly unscathed with luxury sales rising nearly 17 percent in department stores in 2008 and 2009, according to a 2010 McKinsey South Korea Luxury Goods Survey. Korea’s $4 billion luxury market accounts for four percent of global sales, the report said.
Industry watchers downplayed the potential impact of this latest military clash, arguing that consumers here have become so accustomed to the ongoing tensions between the countries that they barely alter their behavior when these types of events occur.
“We have experienced these kinds of things many times before,” SK Lee, a Hyundai Securities consumer analyst, said. “If you look at [the March sinking of a South Korean war ship], maybe for a very short time it had an effect, but after we witnessed a recovery in sales. If the tension continues, they might stop shopping, but it is only temporary.”
“There was some kind of temporary freeze on spending, but it has recovered again because they [consumers] think these kind of political issues are a one-off,” Lee said.
Retailers don’t seem that concerned either.
“People, even myself, do not think it’s a big thing,” said a spokeswoman for Gucci Korea. “To be honest, there’s no negative influence in terms of the business to the fashion brands, especially luxury fashion.”
While global stocks have recovered after the attack, Asian stocks opened lower Friday amid continuing worries about tensions between the two countries. Gold fluctuated earlier in the week as tensions escalated between the North and the South.
Kate Park, a spokesperson for Lotte, Korea’s biggest department store, brushed off the issue as virtually inconsequential: “There is no real significant effect on our retail business,” she said during a brief phone conversation. “It is not really as big a matter as you think.”
The Tuesday attacks coincided with the worldwide launch of the Lanvin (Hearts) Hennes & Mauritz collection but a spokeswoman said sales “went well” in Seoul.
“We have not noticed any effects due to the recent incident,” she said.
Customers shopping for winter coats in a Lotte Department store Thursday didn’t seem fazed by the situation.
“Not at all,” said Huang Minji in response to a question about whether the North’s bad behavior will stop her from shopping. “I think it is just a political show.”
Huang said global events, like the financial crisis, are more likely to cause her to tighten her purse strings.
George Svinos, KPMG’s head of retail for Asia Pacific, voiced a similar sentiment. “It is consumer confidence that drives people into stores,” he said. “That is what we are talking about, are people confident with their future.”
Or at least for some Koreans, especially those living in Seoul, which is only about an hour away from the border with North Korea, there is a feeling that there is no other choice but to be confident and carry on.
“I feel unstable and anxious, but I know I cannot do anything to change the world,” said Kim Hyung-kyu while shopping with his wife, daughter and granddaughter in Lotte. “So I will just keep living my daily life.”