[Weekender] VIB treatment: Luxury market surges for ‘very important babies’

Despite falling birth rate, childrenswear sales show no sign of abating, led by luxury fever among fashion-savvy young parents

The first BabyDior store at theGangnam branchof ShinsegaeDepartment Storein Seoul (Shinsegae Department Store)

Despite South Korea’s notoriously low birth rate, its childrenswear market shows no sign of abating, especially led by the binge spending of young parents.

“Most parents that I know think that putting a luxury onesie that costs hundreds of dollars on a baby is excessive because they grow out of clothes so quickly. But, there are also some parents, particularly those who are well-off, who are willing to buy expensive clothes for their kids,” said a 38-year-old Seoul resident surnamed Hong who is the father of two sons.

Some parents argued that purchasing luxury childrenswear is not so excessive given that one can always resell their kids’ clothes on online secondhand trading platforms. “If you keep the clothes in good condition, you can resell them and save a good amount of money,” a 40-year-old mother of a seven-year-old daughter surnamed Kim said.

According to global market company Euromonitor, Korea’s childrenswear market came to around 2.45 trillion won ($1.76 billion) last year, up 33 percent from 1.84 trillion won in 2020.

This figure shows robust growth considering the number of children aged between 0 and 14 decreased by 9.5 percent to 5.7 million during the same period.

In the Asia-Pacific region, Korea outpaced Hong Kong in terms of average annual spending on childrenswear in 2022 for the first time. Last year, Korea’s annual average was $332, the fourth-highest figure after $548 for Singapore, $392 for Taiwan and $377 for Japan.

Euromonitor says there is more room for Korea’s spending considering the market dynamics compared to its Asian peers.

Luxury brands, in particular, have seen noticeable growth in recent years. Monclear Enfant and Gucci Kids were the two childrenswear brands that posted the highest growth rates – 16 percent and 20 percent, respectively, between 2018 and 2023, according to Euromonitor.

Luxury kidswear brands may not have the largest pool of customers, but they have successfully expanded their customer base.

“Younger fashion-conscious parents are showing keen interest in children’s clothing. Some of them are willing to spend big on luxury designer brands,” an industry official said.

In recent years, local department stores have been increasingly locating luxury children’s brands out on prime floor space, enjoying robust sales.

According to Shinsegae Department Store, the nation’s No. 1 department store chain, imported childrenswear posted a 24-percent growth in sales in 2022, with 15 percent in 2023 and 8.3 percent in the first half of this year. Its top-selling brands included Baby Dior and Moncler Enfant.

Crosstown rival Hyundai Department Store also saw a 23.6-percent increase in the sales of luxury childrenswear in the first quarter of this year alone.

While luxury childrenswear brands have expanded their presence here, smaller designer brands also have enjoyed increasing demand for more diverse kids' clothing, fueled by their effective strategic marketing via social media, especially Instagram.

“I used to like browsing through items on adult female influencers' accounts on Instagram. But after having my own kid, I found myself following baby or children influencers in search of pretty clothes and accessories for my kid,” said a 35-year-old mother of a two-year-old son surnamed Yoon.

Kidikidi, an online childrenswear shopping platform under the nation’s fashion and retail giant, E-Land Group, is one of the success cases.

“The platform grew fast by introducing fashion brands by influencers on Kidikidi. The strategy has done well attracting younger parents who are familiar with online shopping through social media,” an official from Kidikidi said.

The combined value of transactions made on Kidikidi increased by 230 percent, from 30 billion won in 2020 to 100 billion won in 2023. The company aims to post 120 billion won in sales this year.

By Shim Woo-hyun(ws@heraldcorp.com)