The VIP-exclusive shopping event “The Private” hosted by Lotte Department Store.
SEOUL, Jan. 27 (Korea Bizwire) — South Korea’s luxury department stores are increasingly reliant on high-spending VIP customers, with their contribution to total sales surpassing 50% at some retailers in 2024, reflecting a growing polarization in consumer behavior amid economic challenges.
According to industry data released on January 26, VIP customers accounted for 51% of sales at Galleria Department Store last year, up from 42% in 2020. Lotte Department Store and Shinsegae Department Store reported VIP contributions of 45%, while Hyundai Department Store followed at 43%.
In response, department stores are raising spending thresholds for VIP status to secure affluent customers. At Shinsegae, the “Diamond” VIP tier now requires annual spending of ₩70 million, up from ₩60 million in 2024, while “Platinum” rose from ₩40 million to ₩50 million. Despite the higher benchmarks, Shinsegae’s VIP clientele grew by 3.7% last year.
Hyundai Department Store similarly raised its top-tier “Jasmin Black” threshold from ₩120 million to ₩150 million, while Galleria increased its highest “PSR White” tier requirement from ₩100 million to ₩120 million.
A VIP invitation-only event hosted by Hyundai Department Store.
The competition among retailers to attract and retain VIP customers has intensified, with enhanced perks such as exclusive lounges, priority parking, and personalized shopping experiences. Some stores now offer VIP-only sections on their mobile apps, luxury events, and curated cultural experiences.
Shinsegae Department Store’s Gangnam branch became the first in South Korea to surpass ₩3 trillion in annual sales last year, with its differentiated “VIP lounge” services cited as a key factor. The photo shows a customer enjoying refreshments and video services at the Upper House Lounge in Shinsegae Gangnam.
For example, Shinsegae introduced a private lounge for top-tier VIPs and launched “The Showcase,” an exclusive online shopping platform featuring unique products and services.
Hyundai held private parties at luxury hotels and offers regular delivery of premium plants and flowers to VIPs. Galleria’s top-tier customers receive unlimited discounts and access to exclusive events, such as yacht experiences during Seoul’s World Fireworks Festival.
Amid the race to cater to high-spending customers, retailers are also tackling fraudulent receipt trading used to meet VIP criteria. Stores have tightened monitoring of purchase verifications and post-purchase validations to ensure the integrity of their loyalty programs.
“Securing loyal, high-value customers is essential for maintaining competitiveness,” said a department store official. “Our focus is on delivering premium products and differentiated services to reinforce our brand’s luxury positioning.”
With spending thresholds expected to rise further in 2025, South Korea’s department stores are positioning themselves to meet the demands of the country’s most affluent shoppers, even as broader consumer sentiment remains subdued.
A view of the “Personal Shopper Room” (PSR) at Shinsegae Department Store, an exclusive space accessible only to customers who spend over ₩100 million annually.
Ashley Song (ashley@koreabizwire.com)
