Buy Luxury Goods with Bitcoin... Gucci's Astute Decision [Hye-won Ahn's World of Luxury]

[Hye-won Ahn's World of Luxury] Episode 72

Gucci and Dupont Allow 'Coin Payments'

Why Luxury Brands Accept Cryptocurrencies

In North America, Gucci stores now allow customers to purchase products with over ten types of virtual assets (cryptocurrencies) including Bitcoin, Ethereum, and Dogecoin. The process involves store staff sending a link via email, which the customer clicks to scan a QR code for payment.

Not only so-called 'innovative companies' like Tesla and PayPal, but also traditional luxury fashion brands are increasingly adopting cryptocurrency payments. This is seen as an attempt to attract 'newly wealthy' individuals who have made significant profits from cryptocurrency investments as new consumers.

Luxury Brands Adopting Cryptocurrency Payments

According to foreign media and the luxury industry on the 19th, Paris Printemps, one of France's top three department stores, is collaborating with the virtual asset exchange Binance and the French fintech company Lyzi to accept cryptocurrency payments, including Bitcoin and Ethereum, in its stores. It is known as the first case among European department stores.

The industry expects this trend to spread. The recent sharp rise in Bitcoin prices has also had an impact. David Prinçay, president of Binance France, stated, "There has been quite a lot of inquiry and interest regarding cryptocurrency payments. We are in discussions with other luxury brands about cryptocurrency payments."

A Gucci store in Seoul. Photo=Choi Hyuk

Previously, Balenciaga also allowed customers to pay with Bitcoin and Ethereum at some online and offline stores in the U.S. The Italian fashion brand Off-White has also set up a system for cryptocurrency payments. The Kering Group is experimenting with expanding the cryptocurrency payment system to all brands through Gucci. Gucci's pioneering adoption of cryptocurrency payments is also aimed at achieving an early 'lock-in effect.'

"Wealthy Millennials Use Cryptocurrencies"

The reason luxury brands are increasing their touchpoints with cryptocurrencies is to attract the MZ generation (Millennials + Gen Z) who have made money through cryptocurrency investments as new consumers, especially as the luxury consumer base is shrinking due to economic downturns.

The case of famous influencer Eunice Ung, who recently purchased luxury goods using digital assets, is a telling example of the intentions of luxury brands. She is a well-known investor among cryptocurrency advocates, affectionately known as 'Unicorn,' and recently announced that she bought several luxury watches, including Audemars Piguet's 'Royal Oak,' with cryptocurrency. However, she purchased these luxury goods not from official stores but from the resale and secondary markets. This is because few luxury brands have established cryptocurrency payment systems, and even if they do, the procedures are cumbersome.

According to Reuters, Eunice Ung said, "It takes too long to buy items from luxury stores," and "I want to buy things right now. If I purchase luxury goods in the future, I will choose the secondary market rather than through stores."

In front of a Louis Vuitton store in Seoul. Photo=Choi Hyuk

Research by TripleA, a cryptocurrency payment company based in Singapore, predicts that by 2025, Millennials will account for about 50% of the global luxury market. Among these Millennials, half of the millionaires (in dollar terms) are found to hold more than 25% of their wealth in cryptocurrencies.

Hye-won Ahn, Hankyung.com reporter anhw@hankyung.com