On January 17, Prada Beauty launched its first standalone boutique in South Korea, “Prada Beauty Seongsu,” located in Seongsu-dong, Seongdong-gu, Seoul. (Photo courtesy of Prada Beauty)
SEOUL, March 9 (Korea Bizwire) — As the economic downturn persists, South Korea’s luxury market is witnessing a shift in consumer spending habits, with high-end cosmetics sales outpacing those of expensive fashion items like designer handbags and apparel.
According to the retail industry on Sunday, luxury beauty brands such as Prada, Hermès, and Givenchy saw their cosmetics sales rise by 16–24% in 2024 across South Korea’s top three department store chains—Lotte, Shinsegae, and Hyundai. In contrast, luxury fashion sales at these retailers grew at a much slower pace of 5–11% during the same period.
By retailer, Lotte Department Store’s luxury cosmetics sales surged 20%, while Shinsegae and Hyundai recorded increases of 16.3% and 24.0%, respectively. These figures far outpaced the modest growth in luxury fashion sales at each department store—around 5%, 6.2%, and 11.7%, respectively.
The trend, known as the “lipstick effect,” emerges during economic downturns when consumers forgo big-ticket luxury items in favor of smaller indulgences like high-end lipsticks and eyeshadows.
L’Oréal Korea officially launched Prada Beauty in South Korea in August 2024. The brand’s product lineup consists of three categories: color cosmetics, fragrances, and skincare. Even before its official release in the country, the Monochrome Lipstick gained significant popularity, sparking an online shopping frenzy among South Korean consumers. (Image courtesy of L’Oréal Korea)
“With the prolonged economic slowdown, the demand for ‘small luxury’ items from prestige beauty brands remains strong,” said Min Da-hae, a beauty buyer at Lotte Department Store.
A Hyundai Department Store representative echoed this sentiment, noting that the luxury beauty segment is driving overall cosmetics sales growth, as consumers opt for premium skincare and makeup instead of costly designer bags.
E-Commerce and Luxury Brands Expand Beauty Offerings
The shift is not limited to brick-and-mortar stores. E-commerce giants are ramping up their luxury beauty business to meet growing consumer demand.
Coupang, one of South Korea’s largest online retailers, launched its R.LUX (Luxury Beauty) platform in October 2024, expanding its roster of premium beauty brands from 22 to 34, including international names like Lancôme and Estée Lauder. Some of the most expensive products, such as anti-aging creams, are priced as high as ₩1.3 million ($980).
Coupang’s Luxury Beauty Platform R.LUX Wins UX Award at iF Design Awards 2025
Coupang announced on March 7 that its beauty vertical service, R.LUX, has won the User Experience (UX) Award at the iF Design Awards 2025, a prestigious global design competition held in Germany. (Image courtesy of Coupang)
Luxury fashion houses are also expanding into beauty as global economic uncertainty weighs on their traditional markets. Louis Vuitton announced plans to launch its first-ever cosmetics line, La Beauté Louis Vuitton, in fall 2025.
While details regarding product categories and potential standalone stores in South Korea remain undisclosed, industry experts see this as a strategic move to offset weaker fashion sales.
The luxury sector’s shift toward beauty is underscored by Louis Vuitton Moët Hennessy (LVMH), the parent company of Louis Vuitton, Dior, and Fendi. In 2024, LVMH’s revenue fell 2% to €84.68 billion ($91.5 billion), with its fashion and leather goods division declining 3%, while fragrance and cosmetics sales grew 2%.
Prada has also been expanding its beauty footprint since launching its cosmetics line in 2023. In August 2024, the brand entered the South Korean market, opening locations at Shinsegae Department Store’s Gangnam branch and The Hyundai Seoul. In January 2025, Prada Beauty opened its first standalone flagship store in Seoul’s trendy Seongsu district.
Louis Vuitton announced plans to launch its first-ever cosmetics line, La Beauté Louis Vuitton, in fall 2025. (Image courtesy of Louis Vuitton )
“Luxury brands maintain a loyal customer base even in times of economic uncertainty, but they are not immune to slowing sales,” said an industry insider. “By expanding into cosmetics, they can secure more stable revenue streams that are less affected by economic fluctuations.”
As the global economy remains uncertain, the luxury industry’s increasing focus on beauty could redefine the landscape of high-end retail, with South Korea emerging as a key market for this evolving trend.
Inside the Prada Beauty Pop-Up Store at Shinsegae Department Store Gangnam (Photo courtesy of Shinsegae Department Store)
Lina Jang ([email protected])
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