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Lotte Department Store, Sogong-dong flagship. (Photo = Lotte Shopping) |
[Alpha Biz= Paul Lee] uxury brand giant LVMH (Louis Vuitton Moët Hennessy) has reportedly raised concerns about the rebate practices between major department stores in South Korea and Chinese Daigou (personal shoppers).
According to retail industry sources on Tuesday, LVMH recently requested that department store buyers cease offering rebates to Chinese Daigou during meetings.
Major department stores in South Korea have been operating a rebate system, offering a percentage of the purchase amount back to large-volume buyers, including Chinese Daigou, who are significant customers. This practice, initially introduced to attract foreign VIP customers, has raised concerns as it is being exploited by Chinese Daigou.
Chinese Daigou typically purchase luxury items from duty-free stores or department stores at discounted prices in bulk and then resell them in China and Southeast Asia.
Luxury companies like LVMH believe that such sales practices could potentially harm the brand value of their products. However, it is reported that LVMH is the only luxury brand that has raised issues regarding the rebate system so far.
A department store official commented, "In response to LVMH's request, we plan to review the current status of the rebate system at the store level."
Previously, Lotte Duty-Free also decided to halt all duty-free sales to Chinese Daigou as part of efforts to improve profitability, signaling that the luxury industry and duty-free sector are moving toward eliminating such rebate practices.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
