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In the wake of Kim Jong Il’s death and the changes taking place in North Korea, I was interested to read a recent article on Reuters that discussed the ways luxury marketers are targeting South Koreans.

I have previously written on the trend for Chinese consumers to purchase fake luxury carrier bags, demonstrating that the Asian love affair with luxury seemingly continues to go from strength to strength.

As the world’s 13th largest economy and an increasingly affluent base of consumers, marketers have offered consumers there a novel way of purchasing luxury goods – through mass-market access.

South Koreans will now be able to purchase designers items during their weekly shop at Seven Eleven. The chain, ubiquitous throughout South East Asia, also sold Gucci shoulder bags and wallets during Korea’s Thanksgiving festival in September.

“It was a big success, and we are thinking of expanding our luxury gift line to other accessories for the New Year,” said Seven-Eleven marketing official Cho Yun-jung.

But it’s not just convenience retailers like Seven Eleven that are cornering this market. Retailers Tesco and Lotte Mart, an Asian hypermarket, are also selling Chanel, Prada, Ferragamo and Balenciaga.

The luxury goods market is booming in Korea, with sales growing “at least 12% to an estimated $4.5 million last year,” according to a report by McKinsey & Company in August. This can be attributed to demographics – with more working women who have additional disposable incomes – as well as tourists from nearby China and Japan, who stock up on luxury goods in trips to the region, attracted by South Korea’s cheap currency.

Furthermore, South Koreans have increased access to credit as local banks are eager to provide shoppers with tailored credit cards to fund their spending habits, for example the Hyundai Card which offers “the Black” and “the Purple,” with various luxury life style-friendly features.

The Financial Times has reported that the latest strategy of French luxury giants in Korea is investing in affluent districts such as Chungdham and Apgujeong-dong.

It seems South Korea is the latest strategic location where luxury marketers are investing to strengthen their brands.

A luxury company must vigilantly protect its brand to ensure that it remains in control of its image. A company like Gucci certainly wouldn’t want other parties to misappropriate its trademark or the look of its products in counterfeit goods. But what happens when your company’s name is the same as someone else’s, and this person, while related to your founder, wants to set up a completely different company?

Gucci is attempting to answer just this question at the moment. Elisabetta Gucci, great-granddaughter of founder Guccio Gucci, and artistic director of an Italian interiors and accessories company, recently announced that she is putting her name on a luxury hotel that plans to open in Dubai next year, with the hope of starting a chain of hotels. The fashion house has issued a statement clarifying that it has nothing to do with Ms. Gucci’s plans, and said “”If necessary, Gucci will take any needful step to protect its rights.”

It’s an interesting conundrum. Elisabetta Gucci can say that she isn’t trying to take advantage of her famous heritage, but in my opinion, if that were the case, the hotel could have chosen a different name (though in that case we probably wouldn’t have heard about it). So there’s certainly publicity value in her name, whether or not she actively tries to dissociate herself from Gucci the company. We’ll have to see how much Elisabetta Gucci’s hotel matches the fashion house’s aesthetic, and whether the fashion house will make good on its threat if the two are similar.

Photo by Kai on Flickr.

Earlier this month the Luxury Institute released a survey that found that when buying a handbag, men in the US are more concerned with the label than with the price compared to women. 73% of men looked first to the label when buying a handbag (compared to 50% of women), and men were three times as likely to choose Chanel.

It would have been interesting if the Luxury Institute had determined (or at least released) what the actually percentage of spending on handbags is for men versus women. I have a sneaking suspicion that women purchase the vast majority of handbags for themselves and men buy only a tiny percentage as gifts. US leather goods seller Coach was the most familiar brand of designer handbags, recognized by 52% of respondents. 24% recognized Gucci, 22% Louis Vuitton and 21% Prada.

This makes sense—Coach bags are relatively mid-range (costing several hundred dollars) compared to European labels whose bags can cost in the thousands. Men may choose the fancy bags on the basis of brand but women are buying more of the cheaper Coach bags as they’re less concerned with label compared to other factors like price and quality.

If it is true that women buy the vast majority of handbags, the marketing challenge is then to get men to buy more handbags for women. This completely opposes the status quo in the jewelry industry, in which the goal is for women to buy more jewelry for themselves.

In our semiotic society, luxury brands deliver the ultimate sense of individuality and personal identity as emulated in products and services we choose.

Historically the luxury category survived by providing products which could not be had by everyone. These were distinguished by their scarcity, rarity, design excellence, classicism and cost. Luxury was the province of the rich, or a unique occasion for those who normally could not afford it. For years luxury was also the territory of those who could distinguish it. In times of recession, luxury brands pursued textbook strategies to survive: narrowing licensing, consolidating retail and messaging, reissuing heritage designs, limiting production, brand extensions.

Mass communications, marketing, media and the internet transformed the category. The earliest phenomenon was the segmentation of luxury into distinct levels spanning high-end house brands to premium luxury, with multiple gradations in between. Hijacked brands such as Hummer also entered the luxury marketplace, adopted by constituencies never imagined or solicited by their creators. More recently the category realized that consumers wanted affordable luxury, opening the market to new products like premium chocolates and coffee, that is, commodities with luxury attributes, but at the accessible price point.

Internet-based supply chain solutions enabled mass customization later in the supply side process – apparel and footwear retailers like Lands End, Converse and Brooks Brothers now offer affordable product tailored to customers unique specifications of measure and material, formerly the exclusive domain of luxury. With luxury so widely available to the mass market, demand has increased for low-tier luxury, evidenced by the $500 billion of counterfeit luxury goods trafficked yearly. The high end now demands what IHT Style Editor Suzy Menkes recently characterized as ‘extreme luxury’, aspirational products at the tipping point of price, production and quality.

A good deal of inventiveness has been observed in the creation of brand extensions in the category, which currently is experiencing a thriving market. A fine example is Bulgari, who have applied their mark to fragrance and eyewear (the first classic brand extensions of couture), a resort, a car, and a commissioned romance novel featuring a string of Bulgari pearls as the main character.

The luxury category exhibits hybrid behavior, in that their innate constraints – the expression of heritage values- cannot be easily surrendered without devaluing or transforming brand perception. Witness Gucci and Saint Laurent, once languishing, now revived, but not at the expense of their heritage. Luxury is Darwinian. The original attributes must remain, but in peaceful coexistence with all-important brand innovation.

Stanley Moss is the founder of Diganzi, the international brand consultancy. You may also be interested in reading Jack Yan’s thoughts about luxury.