The unshakeable loyalty and high brand favorability among South Korean consumers come as something of a surprise, considering a series of controversies that Zara has been involved in over the past few years, dating back to 2015 when a market report by Morgan Stanley showed Zara’s prices in South Korea were the highest in the world, nearly double those in Spain. (Image: Kobiz Media)
SEOUL, May 30 (Korea Bizwire) – Despite a number of controversies surrounding the CEO of Zara Korea, high clothing prices, and little to no social contributions, soaring sales of the Spanish fashion brand in South Korea show no sign of peaking soon, with the chairman the of the company’s local partner LOTTE awarded a royal medal by the King of Spain earlier this month.
A recent audit report by the Spanish fashion brand submitted to the Financial Supervisory Service (FSS) revealed sales at the more than 40 Zara stores in South Korea increased by 19 percent in 2016 compared to the previous year, while profits increased by a whopping 225 percent over the same period.
Apart from 2014, when the company suffered an operating loss or around 1 billion won, Zara has experienced a steady increase in both sales and revenue.
The unshakeable loyalty and high brand favorability among South Korean consumers come as something of a surprise, considering a series of controversies that Zara has been involved in over the past few years, dating back to 2015 when a market report by Morgan Stanley showed Zara’s prices in South Korea were the highest in the world, nearly double those in Spain.
Compared to its Chinese and Japanese neighbors, prices set for the South Korean market were considerably higher.
The fashion brand was embroiled in another controversy in 2016 when the country was rocked by former president Park Geun-hye’s corruption scandal that spawned numerous candlelight vigils, over what many thought to be disparaging and insensitive comments by Zara Korea CEO Lee Bong-jin.
Speaking to an audience at a lecture, Lee was allegedly heard criticizing protesters, saying, “While you are out protesting, the other 49 million citizens are doing something. Your future relies on you. Just like Donald Trump’s election as U.S. president, politics have no influence on your life. Just keep on studying instead.”
After a transcript of his speech was widely shared on Twitter, fiery criticism online forced Lee to post an apology on the internet.
Despite a number of controversies surrounding the CEO of Zara Korea, high clothing prices, and little to no social contributions, soaring sales of the Spanish fashion brand in South Korea show no sign of peaking soon, with the chairman the of the company’s local partner LOTTE awarded a royal medal by the King of Spain earlier this month. (Image: Yonhap)
Zara Korea has also made zero social contributions since launching its South Korean operations in 2011, a simple fact that has not been lost on the company’s critics.
In the midst of all the controversies however, ZARA is still the second most popular fast fashion brand in the country, leaving behind the likes of international fashion retailers GAP and H&M, according to a collective brand awareness survey conducted by the Korea Economic Daily and pollster Realmeter in 2015.
Hyunsu Yim (hyunsu@koreabizwire.com)
