South Koreans are the most significant spenders on luxury interests
January 16, 2023: Whether it’s calf-leather Italian Prada bags or checkered British Burberry trench overcoats, South Koreans are the biggest spenders all over the world on personal luxury goods for each capita, Morgan Stanley said.
The investment bank measured South Korean spending on personal luxury goods to grow 24% in 2022 to $16.8 billion, or nearly $325 per capita. That’s far over the $55 and $280 per capita spent by Chinese and American nationals, according to Morgan Stanley estimates.
Luxury brands have also focusing solid sales in Korea.
Moncler stated that its revenue in South Korea “over doubled” in the second quarter compared to before the coronavirus pandemic. Cartier-owner Richemont Group noted that Korea was among the regions where sales increased by double digits in 2022, such as a year and two years back.
While Prada said China lockdowns contributed to a 7% decline in 2022 retail performance, the fashion house said the drop was “mitigated by the strong performance in Korea and South East Asia.”
Morgan Stanley analysts explained that South Korean buyers’ demand for luxury goods is driven by increased purchasing power and a desire to exhibit social standing outwardly.
“Appearance and financial success can resonate more with consumers in South Korea than in most other countries,” analysts wrote in the report.
To go with ‘SKorea-fashion-entertainment’,Segment by Jung Ha-Won.
In a photo taken on September 4, 2015, people attend a Gucci ‘pop-up store’ event in the Gangnam area of Seoul. Seoul is emerging as Asia’s new fashion showcase, with the world’s top luxury firms seeking to cash in on the trend-setting regional popularity of South Korean pop culture. Fast-growing Asia is an important market driving the global luxury industry, with purchases by Chinese consumers accounting for one-third of global sales, ma stated.
Displays of wealth are also more socially acceptable in Korean society. A McKinsey survey found that only 22% of Korean respondents consider showing off luxury goods to be in bad taste, compared with 45% of Japanese and 38% of Chinese.
Bank of Korea data shows the government’s household net worth rose 11% in 2021. About 76% of household wealth in Korea is in real estate, which has increased substantially since 2020. The increase in household wealth also supported the demand for luxury wares.
The investment bank also noted luxury houses had tapped Korean icons to catalyze demand further.
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