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Kelly Yoon, a 38-year-old mother from the middle-class suburb of Songdo, was surprised by the designer goods dripping from other mothers when she attended a school event for her 9-year-old daughter. .
“I saw all kinds of Chanel bags on my way to class,” she said. “My mother is Bvlgari’s Diva’s Her Dreams and Vans She loves her Cleef & Arpels jewelery collection, and her Moncler Winter jacket is actually her mother’s ‘uniform’ here. The most popular car is the Mercedes-Benz SUV. “
A strong mix of status seekers, wealthy homeowners and millennials doing YOLO (you only live once) combine to make Koreans the world’s largest per capita consumer of luxury brands This is what happened.
From designer handbags to $2,000 puffer fish jackets, South Koreans’ spending on personal luxury items will grow 24% to 21.8 trillion won ($16.8 billion) in 2022. Moon.
Fueling the surge was South Korea’s runaway housing boom, with property prices doubling during the pandemic in some cities, making homeowners feel wealthier. Conversely, young Koreans despairing of not being able to climb the real estate ladder decided to spend their income on luxuries instead.
The trend reflects a global rise in luxury spending, driven in part by the rise of global wealth, with Bernard, the French mogul behind luxury goods powerhouse LVMH.・He helped Arnaud become the richest person in the world.
“During the pandemic, everyone was very optimistic about their future,” said Lee Won-jae, a sociology professor at the Kaist Graduate School of Cultural Engineering in Daejeon. “Consumer confidence was very strong because stocks, cryptocurrencies and house prices were going up. I believed.”
Ahn Dong-hyun, an economics professor at Seoul National University, said millennials also contributed to the luxury goods boom. “Maybe they’re giving up buying a house and trying to be happy by buying something expensive instead.”
Luxury purchases by people in their 20s will increase by 70% in 2021 compared to 2018, according to a 2022 report from the member loyalty unit of retail giant Lotte Group. had the strongest growth in
Christine Lee, 30, who makes about $24,000 a year at an insurance company, said she bought a Marni handbag for 1.6 million won in 2020.
“All my friends have at least one luxury handbag,” she said. “Her Gen Z motto in South Korea is she’s YOLO. A house is too expensive to buy, so why should I save money for the future?”
An Instagram post boasting of her extravagant purchases also inspired her, Lee said. According to her Hootsuite report for 2022, South Korea ranks third in the world in terms of active social media users, accounting for her 91.2% of the population. The rise of Korean pop culture, represented by her boy band BTS and the Oscar-winning film Parasite, has led top fashion houses and luxury brands to have Korean stars as ambassadors.
celebrities such as squid game Actress Jeong Ho-young has endorsed brands such as Louis Vuitton and Bentley on Instagram, while members of girl band Blackpink have endorsed luxury brands such as Chanel, Bvlgari, Cartier and Tiffany & Co.
Dior announced earlier this month that it has signed BTS member Jimin as its global ambassador. Jimin was attacked by fans shouting and chanting his name at a fashion show in Paris last week.
In his role as new global ambassador, JIMIN embodies the timeless spirit and singularity of Dior, continuing his bond with Kim Jones, who designed in 2019. @BTS_BigHit I see the stage and cement my friendship with House. pic.twitter.com/CfneYyLVbK
— Dior (@Dior) January 16, 2023
South Korean consumers are likely to sympathize with the importance of looks, with spending on cosmetic surgery appearing to start at a young age and much higher than in most other countries, according to Morgan Stanley analysts. .
With a population of just 51 million, South Korea is as important to luxury goods manufacturers as Japan (population 125 million), accounting for the total retail sales of top brands such as Prada SpA and Moncler SpA. Koreans account for more than 10%. , Bottega Veneta and Burberry Group.
Morgan Stanley said, “In terms of status, many studies show that economic success tends to be valued in South Korea, so personal luxuries become an important tool for creating social hierarchy. In China, consumption of luxury goods amounts to about $55 per person, the report says.
But some headwinds are coming. South Korea’s household debt is higher than Japan, the UK and the US, and the Bank of Korea raised its key policy rate to 3.5% from its July 2021 low of 0.5%, ending the era of cheap currency. In the third quarter of last year, real estate prices in South Korea fell the most in the world.
“This kind of boom doesn’t last forever, and it could be similar to what happened in Japan in the 1990s,” Lee said after the so-called bubble economy burst. –bloomberg
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