- The Arnault family is betting big on K-Pop stars.
- In January, Delphine Arnault’s Dior signed BTS star Jimin as a global brand ambassador.
- Experts tell Insider this is a calculated move to take advantage of the booming South Korean market.
On January 11, Delphine Arnault was nominated by her father, luxury magnate Bernard Arnault, to lead Dior. Within days, the fashion house named Jimin, one of the seven members of the K-Pop supergroup BTS, as a global brand ambassador.
The singer’s agency, HYBE, directed Insider to a statement from Dior that Jimin “embodies the spirit and uniqueness of the Dior style.”
—Dior (@Dior) January 16, 2023
Delphine Arnault’s move comes more than a year after her younger brother, Alexandre Arnault, executive vice president of Tiffany & Co., hired BLACKPINK singer Rosé to represent the jewelry house. Rosé now advertises Tiffany’s “Hardwear” line, a collection of necklaces and bracelets.
And in June, Celine, another brand under Arnault’s massive LVMH umbrella, invited BTS member V, BLACKPINK’s Lisa and South Korean actor Park Bo-gum to the brand’s Spring/Summer 2023 show in Paris. Lisa also worked with the LVMH Bulgari brand, wearing one of her watches in a 2021 campaign.
All of which points to the undeniable: the world’s largest luxury conglomerate is officially betting big on K-Pop.
South Korean idols are no stranger to luxury brands
South Korean celebrities wearing luxury items are a common sight. There are even Twitter accounts dedicated to documenting every branded item they wear. BTS has represented outfits from LVMH brands at star-studded events: All seven members turned up for the Grammys in Las Vegas in 2022 wearing head-to-toe Louis Vuitton.
It’s not just LVMH: In January, BTS rapper SUGA became a Valentino brand ambassador, according to WWD.
And long before BTS, G-Dragon, the leader of BIGBANG, a K-Pop band that dominated the South Korean pop scene in the 2000s, was one of Chanel’s biggest representatives in Asia. The rapper forged a friendship with the late Karl Lagerfeld and in 2015 he walked in the Chanel haute couture show in Paris.
—CHANEL (@CHANEL) July 8, 2015
However, the Arnault family in particular appears to be aggressively entering the South Korean market.
The reason could be in the mathematics. Beyond the fact that K-Pop stars come with legions of fans, South Koreans are now the world’s biggest luxury consumers, CNBC reported, citing figures from Morgan Stanley. The estimated total value of South Korea’s spending on personal luxury items in 2022 increased 24% year-on-year. And the average South Korean person spent at least $325 on luxury items in 2022, far exceeding China’s $55 per capita spending and $280 per capita spending in the US, according to Morgan Stanley.
Soo Kim, a business professor at Singapore’s Nanyang Business School, told Insider that South Korea’s competitive environment and seemingly insurmountable wealth gap are fueling the country’s luxury spending machine. South Koreans collectively racked up a staggering amount of debt in 2021 that exceeded the country’s GDP by 5%, yet they continue to spend heavily on luxury items.
Spending will not stop because brand name items help offset “constant threats” to the “ego” of the average South Korean consumer, Kim added. Luxury items also provide a “psychological release,” giving South Korean consumers control over their physical appearance, she told Insider.
“In addition, Koreans take pride in making their own citizens stand out on the global stage. Seeing their stars represent these luxury homes would have a positive impact on Koreans’ perception of these brands,” Kim said.
A specific move to conquer the South Korean market
Experts say there’s another big reason LVMH is eyeing South Korea: It’s the gateway to Asia.
“If you have South Korea, you have the Northeast Asia market,” Jacob Cooke, chief executive of WPIC, a Beijing-based e-commerce consulting firm, told WWD in January.
There’s also the cultural influence of South Korea, David Dubois, a professor of marketing at INSEAD, told Insider.
“Fashion trends tend to be created and adopted in South Korea, before spreading to other markets in Asia,” Dubois said. He added that LVMH’s K-Pop promotions are a “continuation” of a long-term strategy to “establish lasting footprints” in the South Korean market.
And China, for various reasons, may not be the main market for LVMH products at the moment.
“With the COVID lockdowns and recent sentiment against wealth inequality and the open display of wealth in China, the relationship between luxury homes and the Chinese market is murkier,” said Kim, a professor at the University of California Business School. Nanyang, to Insider.
Kim said it “makes sense” for LVMH to redeploy resources to places like Japan and Korea. She also said that South Korea is “increasingly known” for its K-Pop stars, movies and shows in the US, which also helps with promotions in the United States.
“I’m sure it also doesn’t hurt that Korea receives a large number of Chinese tourists. Once the COVID situation is resolved, it is possible that Chinese tourists, with their purchasing power, will return to Korea,” Kim said. “Investment in Korea could also serve as an indirect way to target Chinese consumers.”
LVMH representatives did not immediately respond to Insider’s request for comment.