Toteme is expanding in Asia. Next stop? South Korea

This article is part of our Vogue Business Membership package. To enjoy unlimited access to Member-only reporting and insights, our NFT Tracker and TikTok Trend Tracker, weekly Technology and Sustainability Edits and exclusive event invitations, sign up for Membership here. Toteme, the fast-growing Swedish label founded by online fashion personality Elin Kling and former art director Karl Lindman, is angling for growth in Asia. The brand, an over €100 million business with stores in Stockholm, New York and Shanghai, has opened its first two stores in Seoul, South Korea — both in the upscale districts of Gangnam. It’s a significant move for Toteme, which launched in 2014 with a collection of modern wardrobe staples. The new stores, designed by Stockholm-based architect and longtime collaborator Christian Halleröd, feature a minimalist setting with suede shelving, textured stone floors and a large fringe chandelier, and carry the brand’s full range of ready-to-wear and accessories. “We are super excited to be here,” says Kling, from Seoul, where she and Lindman will host an exhibition to celebrate the brand’s arrival. It also marks Kling and Lindman’s first time in the country. Korea has become a hotspot in recent years thanks to a global fascination with K-pop stars and general Korean pop culture, and high local and tourist demand. It has also emerged as a reliable spot in APAC to gain new customers, while neighbours like China continue to be affected by Covid lockdowns and store closures. For a number of luxury brands, Korean nationals now account for 10 per cent or more of total retail sales, according to Morgan Stanley. Demand is driven by South Korea’s burgeoning market for personal luxury goods, which reached KRW 21.8 trillion ($16.8 billion) in 2022, up 24 per cent from the previous year, making the Korean market one of the fastest growing since the start of the pandemic, the investment bank found. In the short term, Toteme plans to open more stores across Korea as well as China, in cities such as Nanjing. Toteme is also eyeing other APAC countries including Japan, Singapore and Australia. However, global expansion can be tricky and expensive, and requires the know-how of local teams or partners. In 2021, the brand received a minority investment from Swedish private equity firm Altor, helping it to accelerate global expansion, including opening stores in new markets. The goal is for Toteme to be a Swedish fashion house with global recognition, according to CEO Johanna Andersson, who has led the business since January 2020. The US and China are jointly Toteme’s biggest markets, followed by the UK, South Korea and Sweden. Fifty per cent of sales are via wholesale (Toteme counts just under 300 stockists), while direct physical stores account for 10 per cent but have the highest growth rate, according to Andersson. The brand’s annual growth has been over 80 per cent CAGR since launch, and Asia will be a key engine for future growth, already driving 100 per cent year-on-year growth to date, she says. With the opening of new stores, she expects to see between 30-50 per cent sales growth from Asia in the next one or two years. As South Korea’s luxury market heats up, Toteme will have to prove that it can stand out among peers such as Lemaire, Jil Sander, The Row and Theory, which have been quick to gain a foothold in the region, as well as local brands including LVIR, Le 17 Septembre and Low Classic. Global ambitions Having arrived in Seoul earlier this week, Kling has been in awe of consumers’ “impeccable” dress sense as well as the local approach to retail. “Fashion brands here have made their stores into destinations — spaces to hang out, look at art, have coffee, meet with friends. That’s very much in line with what we want to achieve at our own flagship shops,” she says. Prior to opening stores in APAC (the first was in Shanghai’s Taikoo Li Qiantan shopping area in 2021, followed by department store Réel in 2022, also in Shanghai), shoppers in Asia could buy Toteme from its e-commerce website, as well as online retailers Net-a-Porter and Mytheresa, and local boutiques such as Boon The Shop and Tom Greyhound. The brand counts the highest number of social media followers in Seoul, followed by New York. “In Asia, we have enjoyed a strong following from very early on and we are excited to open more stores here, to be closer to our community and meet with our customers in-person,” says Kling. Entering a foreign market is no easy feat, however. In contrast to the opening of its New York store in 2022, which was managed independently, Toteme enlisted the help of local partners in Seoul and Shanghai to help source a location, build the space, manage logistics and operate its stores. “Not every brand will have the same approach but the general notion is that the further away it is from your home market, the more complex it is due to obvious reasons like time differences but also cultural differences,” says Andersson. “We have gone with partners who are very committed, knowledgeable and experienced in these markets.” Toteme’s stores in Seoul are both shop-in-shops, based in the main Apgujeong branch of the Hyundai department store, in what is notoriously one of the city’s wealthiest neighbourhoods, and Hyundai Trade Center in Teheran-ro, dubbed the “Silicon Valley of Seoul” due to the number of internet-related companies operating in the area. Neighbouring fashion brands include Lemaire, Acne Studios, Gabriela Hearst and Jacquemus. “We’re targeting areas that we know our customers are shopping in,” says Andersson. Reception in Asia While Scandinavia-born brands have historically been cautious about expansion in Asia due to linguistic and cultural barriers, more are starting to see the region as an opportunity for expansion. Danish label Ganni launched on Xiaohongshu (Little Red Book) and Tmall in 2021 and opened its first physical store in Shenzhen in 2022. Anine Bing, launched by the eponymous Danish influencer-turned-designer, has also made headway into China, entering the region via a branded storefront on Alibaba’s Tmall marketplace in 2022. They face competition from Asia’s own emerging brands, such as Seoul-based Andersson Bell, which has built a profitable business based on a reinterpretation of Scandinavian style. Local venture capitalists are bullish on the potential of Scandi-chic brands: in August 2022, investment firm Sequoia Capital China acquired a majority stake in contemporary Norwegian fashion brand Holzweiler. Toteme’s reception in China has been encouraging, offering an early indication to how it might perform in South Korea. The brand is present on primary Chinese social media platforms including Wechat and also operates an e-commerce store on Tmall. It has a particularly high engagement on Xiaohongshu, thanks to its unique positioning, which “bridges the gap between luxury brands pressured to innovate and deliver a ‘wow’ effect each season, and fast fashion, which compromises quality for immediate gratification”, observes Jasmine Zhu, managing partner of Epico Partners, a Hong Kong-based growth consultancy. It taps into the rising consumer trend 高级松弛感 (gaoji song chi gan), which roughly translates to “advanced relaxation”, and “is one of the key themes in Chinese fashion market nowadays”, she says. Korean consumers are often generalised as trend chasers, unlike their Japanese counterparts, who have a reputation for buying fewer but higher-quality products. A new considered consumer is arising in Seoul, Andersson believes. “I think we are quite suitable for the market, which is known for stylish women. They value quality and authenticity, and buy products that stand for something they want to be proud of.” There’s a relatability that makes Toteme appealing, adds Kling. “We think that Toteme speaks to women because they can relate. Our pieces fit into their lives.” Toteme still has more to do to win over the hearts of consumers in Asia. “The brand is relatively well known by a small number of customers with deep knowledge in the niche brand world, but it’s still not really well known [in the mainstream]. It’s usually introduced as a niche blogger brand with minimalist design,” says Zhu. Rising prices, due to an increase in raw materials costs according to the brand, could put some customers off, Zhu warns. A signature wool cashmere coat costs €1,000, while the embroidered mélange scarf jacket — a popular style with stockists — sits at €800. The onus is on Toteme to convince consumers that their products are worth it. Education could help. Opening on Friday is an exhibition at Mue, a retail and event space in Cheongdam-dong, showcasing curated looks from Toteme’s Spring/Summer 2023 collection alongside its campaign, which features models Jeanne Cadieu and Julia Nobis shot by Steven Meisel, with styling by Joe McKenna, hair by Guido Palau and makeup by Pat McGrath. The large-scale photographs are positioned next to mannequins carrying corresponding edits of pieces. The brand is also working with South Korean ambassadors, including actors Roh Yoon-Seo and Young-Shin Kim. Physical activations will continue to play an important role. “Toteme was founded during the boom of the digital era when everyone is always on their phones. We’re part of that generation, and we love it, but we felt that we were missing some emotional layers,” reflects Andersson. “With a physical space, we can invite customers but also press and others from the industry. It gives us ways to manifest the brand and show the customer what we stand for, as well as an opportunity to learn more about them.” That stretches beyond fashion and into art and interior design, she adds. “Every time we open a store, we get more back than what we had hoped for. It always has a spillover effect that creates a halo for our online business,” continues Andersson. “Investing heavily into the experience and putting capital into these retail spaces to make them exciting and something to talk about is worth the investment, because time after time, we see that it gives both the brand and our customers so much back.” To receive the Vogue Business newsletter, sign up here. Comments, questions or feedback? Email us at feedback@voguebusiness.com. More from this author: Valentino and Dior bet on K-pop amid China tensions. Will it pay off? The rising Korean fashion stars making a global imprint Is South Korea’s star fading? Luxury thinks not

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