How Duty-Free Shops and Department Stores Expanded the Luxury Market in South Korea, 1980–2010

Abstract

The purpose of this chapter is to investigate the development of the luxury market in South Korea over the past 30 years, emphasising how duty-free shops and department stores became the main outlets accompanying socioeconomic changes. This chapter comprises three parts and sheds light on the development of South Korean luxury market, a context that involved not only domestic customers but also tourists from Japan, China, and other Asian nations. First, we focus on the historical process of the emergence of South Korean luxury market, mainly focusing on duty-free shops for foreign tourists and department stores for domestic consumers. Second, we explore the luxury brands’ successful changes in local distribution strategies through the establishment of subsidiaries in South Korea. Third, we examine the current situation, which demonstrates a variety of sales channels and changing consumer trends, and look at signs of the democratisation of luxury in South Korea.