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During the last IADS Mid-year meeting in Seoul in June 2025, member CEOs had the opportunity to visit several Korean retail landmarks, including the much-acclaimed The Hyundai Seoul. To provide them with a complete understanding of the specificities of the Korean market, a visit to Hyundai’s first-ever department store in Seoul, in the Apgujeong neighbourhood, completed the tour.

Interestingly, this visit generated the highest number of questions, as this visit allowed all visitors to understand the weight of the VICs[1] in the traditional Korean department store business, to an extent well beyond what is experimented in other retail markets.

This Exclusive aims at understanding the specificities of this store and what it tells about high-end Korean retail. A picture report completes this article.

Hyundai’s first-ever department store

Hyundai Department Store’s roots trace to Keumgang Development Industries (established in 1971) within the Hyundai Group, which opened the Ulsan Centre (now known as the Hyundai Department Store Ulsan Dong-gu) in 1977. This first foray in retail allowed the acquisition of enough know-how to open a department store.

The first unit to be opened was the Apgujeong store, in 1985. This area, an upscale neighbourhood in southern Seoul, is situated along the northern edge of the Han River within Gangnam-gu. Such a choice was visionary: starting from the late 1980s onward, Apgujeong catalysed Gangnam’s premium identity and became synonymous with high-end living, fashion-forward retail, and premium medical and beauty services offered to affluent and trend-conscious HNWIs living in the vicinity. In fact, even though the area is now facing competition from other zones nearby, such as Cheongdam and Seongsu, Apgujeong’s identity today remains closely tied to the emergence of modern Korean consumer culture and the rise of domestic brands.

In comparison, rivals Lotte and Shinsegae opened their first flagship stores in the central Myeong-Dong area, not far from the town hall, and both strategically addressed tourists and the commuting population coming and going from their offices. Hyundai differentiated itself early by placing its flagship in a wealthy residential catchment rather than a central business and/or tourist district. However, even though the choice of the location was wise, Hyundai was not the first-comer in Apgujeong: since 1979, Hanwha was already operating a department store, called “Hanyang Shopping Center”, which would become after a significant upgrade in 1990 as a response to Hyundai, the Galleria department store, first under the name Galleria Fashion Hall, and then, starting 1994, Galleria Luxury Hall[2].

At launch, the Apgujeong Hyundai store boasted the first POS system in Korea, and included a cultural centre, supporting a community-driven strategy and a service-based model, well before “experience” was a thing in retail. This allowed the creation of a strong followership from local customers and loyalty among surrounding VICs, attracted by features such as the “sky garden” (a rooftop including a private club) and several lounges dedicated to specific VIC tiers. Even though Hyundai kept on opening new stores in the city and nationwide, until reaching the current total of 14 locations, Apgujeong remains a prestige location for Hyundai, very differentiated from the more recent The Hyundai Seoul one, and a point of reference for luxury brands.

Since its opening, the store did not go through significant structural changes, except the cultural centre, which has been rebranded CH 1985 and now serves as a boutique cultural space, and the B1 food hall renovation in 2023, where a 6,750 sqm “Gastro Table”, a premium dining concept curated with chef-driven counters and notable dessert brands, was opened (B2 was also renovated at this date).

Visiting the store

The store's second basement level (B2) is dedicated to a surprising assortment for this floor location: women's contemporary and children's fashion, niche and rare perfumes (the luxury brands are on the ground floor), sports and lingerie. The women’s fashion area includes Maison Kitsuné, Ganni, Sandro, A.P.C., Maje, Time (a Hyundai private label), System (a Hyundai private label), Alice & Olivia, Tom Greyhound (the Hyndai-owned Handsome Corporation’s fashion multi-brand concept) and others. The kids' offerings lean towards the luxury side, featuring brands such as Baby Dior, Fendi Kids, and Moncler Enfants. In the meantime, customers can find Nike and Adidas in the sports section, nearby a prime selection of fragrance brands such as Officine Universelle Buly and Creed. To complete the picture, a variety of cafés and restaurants dot the space, with a Nespresso shop and other appliances featured in between.

We found this B2 floor surprising for two reasons. The first one being the assortment, which is very eclectic (and allows to finds brands ranging from Adidas to Baby Dior, Nespresso or Officine Bully). The second one is its positioning in the store as the B1 floor is entirely dedicated to home and food. In fact, given the fact that most customers drive to the store, it is expected that this floor captures their attention while coming from the parking lots (B4, B3). It is notable that the shuttle pods (Hyundai offers a free shuttle service for residents of Apgujeong[3]) and the directly connected Apgujeong subway station go directly into B1, and not B2.

The first basement (B1) focuses on food and living, integrating a gourmet space, a general 1,650sqm-wide  supermarket with self-service and fast POS options, and a food court (“Gastro Table”) that positions food as experience: chef-led counters, elevated service (table delivery instead of self-pickup), and a greener, garden-like interior. In the first six months following its 2023 launch, sales reportedly increased by ~24% and customer counts by around 30% year-over-year, thanks to new experiential offerings, including a premium wine bar accessible via a booking system. The “living hall” features everything to equip homes, from decoration items to beds (Tempur) and sports appliances (running mills).

The ground floor is dedicated to beauty, fragrance and accessory luxury brands, including Chanel, Hermès, Louis Vuitton, Gucci but also hard luxury names such as Cartier and Bulgari. Most of the top luxury brands operate multi-story stores with access to the first floor and, in some cases, also to the second floor. Despite relatively low ceilings, the area features an interesting design with centrally placed escalators (where Jacques Marie Mage sunglasses are sold) and a large atrium.

The first floor features luxury fashion, including foreign names (Golden Goose, Off-White) seen as a point of differentiation and coming on top of the high luxury brands, as well as watches and jewellery (Rolex, Buccellatti, Jaeger Lecoultre, etc..), complete with a luxury lifestyle offering (a large space facing Chanel is dedicated to Astier de Villatte). All brands are deploying their brand concept in three-walled retail units.

The second floor is dedicated to women’s fashion, featuring a mix of international and Korean brands, including Jacquemus, Loewe, Isabel Marant, and MMQ, alongside Colombo and Henri Beguelin. A multi-brand store, Mué, and a series of F&B spaces further enrich the floor.

On the third floor (+3), men's fashion is represented by Gucci and Dior, completed by a lifestyle offering (Bang & Olufsen, Tumi). The adjacency strategy aligns Theory with Zegna, Canali, and across from Solid, Time, and Ralph Lauren. The floor also features a golf wear section, catering to both men and women, with licensed brands such as Lanvin Blanc and APC Golf.  A café by Tom Dixon adds a touch of sophistication.

The fourth floor (+4) houses restaurants and home appliances.

VICs are the secret sauce at Hyundai Apgujeong

While execution is great, especially in the newly renovated B2 and B1, and keeping in mind that luxury represents a significant share of the business in this location, visiting the Apgujeong store is not as out-of-the-ordinary as The Hyundai Seoul (which has made experiential retail and discovery a cornerstone of its strategy) is. In addition, the store is small and feels as such: the six floors from B2 to 4F in total only represent 33,000 sqm, to be compared to the Hyundai Seoul store, the largest in Seoul, with 89,000 sqm of retail space.

And yet, even when taking these elements into account, the productivity of the store is remarkable: it has consistently outperformed the KRW 1 trillion threshold every year since 2021 (€0.6bn) and has been reported during the visit to have achieved a KRW 1.2 trillion performance in 2024 (€0.75bn), making it the 7th best performing store in the Korea in terms of sales (the first place being held by Shinsegae Gangnam with a turnover of €1.83 bn and the second by Lotte Jamsil, €1.8bn).

Many visitors scratched their heads to understand how such a store could achieve these levels of sales before realising the importance of the VIC business in Korea.

This customer segment, which often represents less than 5% of customers, generates around half of Korean department stores revenue. In a country where personal luxury goods spending reached KRW 21.8 trillion (€22bn) in 2022, nearly double since 2014, dependence on VICs has become structural and is a cornerstone of the business for some stores such as the Apgujeong one. With US$ 325 in luxury spending per capita, South Koreans rank ahead of Americans (US$ 289) and far ahead of Chinese (US$ 55).

Who are the VICs in Korea?

The pool of VICs rests on a solid wealth base: the country counts 7,310 ultra‑rich individuals (net worth ≥ USD 30 million) and nearly 1.15 million dollar millionaires, growing 5.6% per year. This increase contrasts with demographic erosion and explains the continued raising of thresholds for VIP programmes. Shinsegae, Lotte and Hyundai today recognise as VIP any customer spending at least KRW 4 million per year (€2,400), but their upper tiers now require up to KRW 150 million (€90,000) for Hyundai (“Jasmin Black”), KRW 120 million for Galleria (“PSR White”, €72,000) or KRW 70 million for Shinsegae (“Diamond”, €42,000).

Demographically, the VIC cohort has become younger. Those aged 20–39 accounted for less than 15% of big spenders in 2015; they form more than 30% in 2024 at Hyundai Pangyo, while several Shinsegae branches located in young‑household catchment areas exceed 40% VICs under 45. This generation shows high disposable incomes (KRW 60–80 million net annually), values “flex culture” and engages in ostentatious display on social media. The low birth rate amplifies this phenomenon: without heavy family burdens, discretionary budgets concentrate on luxury, travel and wellness.

Bain & Co identifies three structuring trends explaining the importance of these customers in Korean retail:

• An income polarisation and the rise in financial wealth despite macroeconomic stagnation,
• A generational extension, with Millennials & Gen Z representing half of the new entrants,
• The sophistication of programmes, which have moved from simple discount benefits to lifestyle, investment (money, art and jewellery) and international networking platforms.

By 2030, they anticipate 4–6% annual growth of the luxury market, but heavier loyalty costs (lounges, events, data analytics) that could push chains to monetise certain services or pool infrastructures.

A look at what a VICs can get in Korea…

VIC purchasing behaviour has evolved over the past ten years. Between 2015 and 2024, the VIP share of department store sales rose from about 25–30% to 43–51%, depending on the chain, despite the rise of e‑commerce. Average per‑capita spending grew by nearly 70%, driven by jewellery‑watch categories and by the resale market, now a vector of up‑trading. The pandemic acted as an accelerator: deprived of overseas shopping tourism, Koreans repatriated their spending to domestic flagships, forcing retailers to multiply private salons, food‑art‑wine events and logistical services (two‑hour delivery, express alterations).

Shinsegae cultivates scarcity: six VIP tiers, including “Trinity”, limited to the top 999 clients (> KRW 230 million per year, i.e. €138,000). Holders access the Trinity Lounge (Gangnam) and cobranded experiences with Michelin or Sotheby’s. The group bets on entertainment (Shinsegae Academy) and on heritage integration: “The Heritage”, a historic bank building transformed into a private club, blurs boundaries between retail, culture and investment. Result: VICs generate 45% of sales, with 3.7% more members in 2024, despite the increase in thresholds.

Lotte, conversely, has widened the base with an “Entry VIP” tier (KRW 20 million per year, €12,000) but tightened the top (“Avenuel Prestige” around KRW 280 million, €169,000). More than 5% of its clientele concentrates more than half of the sales. Young VICs are courted via boutique‑hotel vouchers, fine‑dining experiences and NFT‑Art masterclasses. Lotte also mobilises its ecosystem (Lotte Duty Free, Lotte Hotel) to offer a full value chain, particularly attractive for foreign customers whose share exceeds 10% in certain flagships.

Galleria positions itself in pure ultra‑luxury. Its Apgujeong hall, reconfigured in 2022, raised the VIC share to 51% of sales, a national record. The “G Premium/PSR White” programme (≥ KRW 120 million, €72,000) gives access to the country’s largest VIP Lounge: 2,000 sqm, panoramic view, art gallery and a cellar of 3,000 bottles.

Hyundai, on its side, adopts an experiential strategy. The Hyundai Seoul dedicates 40% of its area to event spaces; its “Black” and “Purple” lounges, accessible from KRW 150 million, include a monthly lifestyle programme (contemporary art, tastings, indoor golf). At Pangyo, those under 40 already make up a third of the super‑tier, with spending growth of +31% in 2024. Hyundai has also formed a cross‑services partnership with Hankyu (Japan) to offer, from 2026, reciprocal benefits to their VICs.

…and at Hyundai Apgujeong

At Apgujeong, Jasmin VICs and Black Jasmin VICs each have dedicated lounges, even on the rooftop, and access to the ultra-private Atelier bar overlooking the rooftop garden. The store is said to have become a gathering place for the wealthy of the area. During the visit, no one was particularly impressed by the lounges. And yet, to qualify, customers need to spend €42,000 for the Jasmin status and €94,000 for the Jasmin Black one.

However, what drives Apgujeong’s outsized sales is not the lounges themselves but the operating system behind them: priority allocation of constrained luxury SKUs (especially watches & high jewellery), appointment-based clienteling that pre-matches inventory to named clients, and reciprocity platforms that extend benefits (and allocation access) across partners abroad. In practice, top-tier members are offered previews and pre-orders, receive same-day alterations and white-glove delivery, and are routed to high-margin categories where ticket sizes compound—often closed inside private rooms with brand staff plus store client advisors. The VIP architecture (tiers, thresholds, lounges) is the front end; the economics come from supply control, client data, and partnership rails that ensure the right pieces reach the right clients at the right moment—consistently.

Seen through the lens of Hyundai Apgujeong, what sets Korea apart is not that a single store operates with ultra‑high thresholds for its top clients, but that an entire market does. Across Hyundai, Shinsegae and Galleria, top‑tier VIP cut‑offs now sit between roughly KRW 70 million and KRW 150 million a year, and these are transparent, published criteria, not opaque invitation‑only rumours. In isolation, Harrods or a top U.S. flagship may approach similar spend bands for their most rarefied clubs; in Korea, multiple chains systematise that bar nationwide and pair it with hard benefits (dedicated lounges, concierge teams, allocation access, and even reciprocity abroad through partners such as Hankyu and Sands China). That is the remarkable part: VIC economics are not a corner case—they are the operating system. In this system, Apgujeong’s “small but sharp” format—hard‑luxury heavy, relationship‑dense, and embedded in one of Seoul’s deepest wealth pools—makes perfect sense. It doesn’t need the theatrics of The Hyundai Seoul to outperform; it needs the right clients, the right inventory, and a membership architecture calibrated to very high spend by global standards—and in Korea, that architecture is market‑wide.

Credits: IADS (Selvane Mohandas du Ménil)