South Korea is facing a rise in consumers who are more mature and sophisticated in their lifestyle. In 2025, the market is expected to balance value with novelty to attract consumers. With the long-standing trend in entertainment and pop culture across Asia and around the world, South Korea has an opportunity that compels retailers and brands to create an impact not only on the regional side but also on local markets.

With a population of 51,69 million and a GDP of $1.760 billion in 2024, South Koreans are the biggest spenders in the world on luxury goods with a cost of $325 per capita, followed by the US ($289) and China ($55). The fashion market in the country is set to grow with a CAGR of 3,6% to touch $25,07 billion by 2029.

Here are the key strategies for retailers and brands to cover the South Korean market which has a major impact in global industry.

Using Cuteness, Art and Media

Brands and retailers have played with the soft culture attribute of the South Korean market through media and art collaborations to attract the Millennials and Gen Z who prefer their luxury purchases to be defined by intangible cultural aspects. They have to support budding artists, especially from popular events like the Busan Film Festival, Korea Art Festival, and Frieze Seoul.

Here, they can also think of going for art and retail crossovers including approaching with in-store merchandise that follows a gallery-like interior design. Mass market brands have an opportunity to grow through YouTube, the emerging commerce channel in the market with users spending an average record of more than 40 hours in January 2024. Either they have to go with big original content or collaborate with creators, influencer-owning channels, and shows to provide shopping links. South Korea is also filled with a large proportion of the kidult population who can be catered to using cuteness as the main prop.

Lotte Home Shopping channel is building itself with a global approach around its mascot Bellygom through a pop-up at the Lotte Duty Free, Myeongdong in April 2024. It also released Bellygom MatchLand, a mobile game, in June 2024. The department store Shinsegae Gangnam is the first Korean store to touch $2 billion in annual returns. It also contributed to attracting Gen Z and Millennials by offering a curated selection of emerging designers and streetwear. Prada hosted the Sound of Prada event in Seoul with celebrities and KOLs such as its brand ambassador Kim Taeri, Ricky and Kim Gyu Vin of ZB1, Seok Matthew and Julie and Natty of Kiss of Life attending it in October 2024.

Capitalising Travel Retail

Not only South Koreans but the global audience are looking for Hallyu-inspired travel retailing. Brands and retailers have to act as the tour guide and launch some foreigner-attracting items and services. It is also important to consider loyalty reward programs and personalised services for foreigners and tourists. The services will include translation apps, working together with duty-free retail and hospitality companies, and other additional offers such as restaurant bookings.

Having multilingual staff and store assistants would be a good idea in this strategy, especially for hotspots like Gangnam and Myeongdong. Retailers and brands can also think of providing gift sets for tourists.

Olive Young has started trials for its new programme Olive Young Express, a bus service that will take the tourists from International Airport in Incheon to Myeongdong in Seoul in August 2024. In April 2024, Lotte Department Store collaborated with SK Telecom’s TransTalker to induce their AI-driven translation service in a total of 13 languages at its Jamsil store. Hyundai Premium Outlets has introduced a 1-month trial of AI Human, the AI chat service that is conversational in Chinese, Japanese, and English.

Combine Value with Speed and Convenience

There is also a surge in brand disloyalty and changing financial priorities for the customers. Brands have to focus more on this to avoid losing customers. The value can be built through considering loyalty reward programs as well as cross-industry collaborations to offer ownerships like subscription services.

They can focus on building micro-distribution centres and hyperlocal supply chain centres to boost last-mile deliveries. For the front end, using AI-based summaries, recommendations, and assistants can save a lot of time for the shoppers and also helps in fighting against paralysis in purchasing decisions as well as minimising the return risks.

Olive Young has extended its quick delivery, which utilises micro-fulfillment centres (MFCs), in the region of Yeongnam in July 2024. It is also aiming to build more than 20 MFCs in medium and small-sized towns by 2025. Hyundai Home Shopping has created a 1-min video summary with AI for its live-stream commerce.

Extending Economy in Experience

Retailers and brands have to prioritise entertaining, educational, and service-powered experiences to support the consumers’ search for meaningful interaction with brands. They have to work on changing and experimenting with their storefront design often. For pop-ups, they can consider using retail theatres and immersive experiences such as sensory-driven retail and playful and fun touchpoints to draw attention.

It is also ideal to conduct invite-only wellness, adventurous, educational, and interactive workshops that can quench the thirst of the consumers’ IYKYK (if you know you know) and OIYK (only if you know) knowledge. The stores can also become entertainment centres by collaborating with the worlds of K-drama, Variety TV, and K-Pop.

Amorepacific featured a rotating store concept and a regular make-up class in its Seongsu Flagship in Seoul. In July 2024, it conducted Amore Game Party, an analogue game-influenced concept in-store. Lotte Duty-Free collaborated with whisky label GlenAllachie for exclusive whisky-tasting classes at its Myeongdong branch.

Extra Care to Gen X and Boomers

Gen X and Boomers are the wealthy, mature, and digitally-active population who are currently on the verge of entering their retirement. Populations who are aged 60 and above bear around 40% of the wealth in the country. More than half of the online shopping mall users are from the age of 50s and 40s.

Brands and retailers have balanced indulgence with brand ethos here. They have to analyse the spending habits, lifestyle, and ways of consumption of the generation. While online is the major part, luxury shopping is also a favourite part for some. In 2023, people in their 40s and 50s spent 68,7% of their spending in luxury stores in Cheongdam-dong.

South Korea is set to become a super-aged society by 2025, at which time people of age over 65 will account for 1/5th of the total population. Brands and retailers have to think of investing in providing healthy and wellness-driven initiatives. One can also consider selling the experience to Gen Alpha to attract the spending of their grandparents. BC Card recorded an increase in spending of consumers aged 60 and above at cafes for kids (up by 54,7%), paediatric care centres (up by 50,6%), and private education (up by 27,3%).

Musinsa, the fashion retailer in South Korea is extending its physical stores to a private brand Musinsa Standard that caters to middle-aged customers who prefer trying on the products in-store.

Cover Image: Olive Young Express, ENHYPEN at Sound of Prada event in Seoul and Amore Game Party, courtesy Klook, The Fashionography and Amorepacific Creatives respectively.