Luxury beauty wins over fashion as consumers adjust spending amid downturn

Korea Herald

09-03-2025

As consumers increasingly seek affordable indulgences, luxury cosmetics are proving to be a lasting trend
Luxury cosmetics have become increasingly popular, with their sales growth rate surpassing high-end fashion items such as handbags and clothing as the prolonged economic downturn continues to affect consumer spending.
According to sales figures from major department stores, luxury cosmetics, including products from brands like Prada, Hermes and Givenchy, saw sales grow significantly.
Last year, the cosmetics departments at Lotte, Shinsegae and Hyundai department stores recorded sales increases ranging from 16 percent to 24 percent, with luxury fashion sales growing by only 5 percent to 11 percent.
At Lotte Department Store, the luxury cosmetics sector grew by approximately 20 percent, while Shinsegae Department Store reported a 16.3 percent increase and Hyundai Department Store saw a 24 percent rise. In comparison, their fashion departments saw only modest growth of around 5 to 12 percent, a sharp contrast to the 30 percent surge recorded in 2022.
This shift in consumer behavior reflects a trend toward more affordable indulgences. Instead of purchasing expensive handbags and clothing, many consumers are opting for smaller luxuries like lipstick and eyeshadow.
"This trend toward 'small luxury' is continuing as the recession deepens. Luxury beauty brands are becoming a go-to choice for many customers seeking a little treat during these tough times,' said Min Da-hae, a purchasing manager in the beauty department at Lotte Department Store.
Luxury brands are responding to the changing market by expanding into cosmetics. Louis Vuitton, the French luxury brand, announced it will debut a new beauty line this fall, marking the brand's first venture into the cosmetics sector since its founding in 1854.
While details about the lineup and whether Louis Vuitton will open standalone stores in South Korea are still under wraps, the move reflects a broader trend in the luxury industry.
Despite a slight dip in global sales for the LVMH group, which owns Louis Vuitton, Dior and Fendi, the cosmetics segment saw a 2 percent increase in revenue in 2024 from a year earlier. Meanwhile, sales in fashion and leather goods fell by 3 percent during the same period.
Prada, another high-end brand, also launched a cosmetics line in 2023 and has since expanded its presence in South Korea, opening a standalone store in Seoul's Seongsu-dong in January.
Industry experts suggest that luxury brands are turning to cosmetics as a stable source of income amid fluctuating demand for high-end fashion.
"Although the core customer base for luxury goods remains steady, the fashion segment has been more affected by the economic downturn. Expanding into cosmetics allows these brands to secure a more reliable revenue stream,' said a luxury brand representative.