Theo Farrant
·2-min read
From Chanel bags to Rolex's, luxury goods have long been a popular purchase for consumers around the world, and this trend shows no sign of slowing down.
Many countries have seen an increase in spending on luxury items, but one country now stands out as the world's biggest spender on luxury goods per capita: South Korea.
According to analysts from Morgan Stanley, South Korea's spend on luxury goods saw a 24% increase in 2022 to €15.4 billion or about €300 per capita.
That's far more than the €46 and €234 per capita spent by Chinese and American nationals.
This buoyant demand for luxury goods can be attributed to a number of factors, including an increase in purchasing power and a desire to display social status.
In Korean society, it is more socially acceptable to display wealth. According to a survey by McKinsey, only 22% of Koreans surveyed believe that flaunting luxury goods is in poor taste, while 45% of Japanese and 38% of Chinese respondents felt the same.
The South Korean luxury market has been growing steadily in recent years, and this growth has been accelerated by the COVID-19 pandemic. With many consumers opting to shop online, luxury brands have seen a significant increase in e-commerce sales.
The luxury craze in South Korea is more than beneficial for brands. Moncler, for example, reported that its revenue in South Korea more than doubled in 2022 compared to 2019. Similarly, the Richemont Group, which owns Cartier and Van Cleef & Arpels, among others, has seen a significant increase in sales in the Southeast Asian country.
In addition to the growing luxury market in South Korea, luxury brands are also tapping into the country's massive entertainment industry to boost their sales.
A prime example of this is the recent appointment of BTS star Jimin as a global brand ambassador for Dior.
Dior announced the partnership with Jimin via social media last month, stating that the appointment of the BTS star "solidifies" his friendship with the French label, and "continues a bond" with the artistic director of menswear, Kim Jones.
Kim Jones has previously designed stage outfits for the K-pop band, further strengthening the relationship between Dior and Jimin.
As an enthusiast deeply knowledgeable about global luxury markets, consumer behavior, and the intersection of pop culture and fashion, let me provide insights into the concepts and trends mentioned in the article by Theo Farrant on June 26, 2023.
1. South Korea as the World's Biggest Spender on Luxury Goods per Capita:
- Evidence: According to analysts from Morgan Stanley, South Korea witnessed a significant 24% increase in spending on luxury goods in 2022, amounting to €15.4 billion or approximately €300 per capita. This surpasses the per capita spending of both Chinese (€46) and American (€234) nationals.
2. Factors Contributing to the Buoyant Demand for Luxury Goods in South Korea:
- Evidence: The article mentions several factors, including an increase in purchasing power and a societal acceptance of displaying wealth. A McKinsey survey reveals that only 22% of Koreans consider flaunting luxury goods as in poor taste, compared to 45% of Japanese and 38% of Chinese respondents.
3. Impact of COVID-19 on the Luxury Market in South Korea:
- Evidence: The luxury market in South Korea has experienced steady growth, further accelerated by the COVID-19 pandemic. The shift to online shopping during the pandemic has significantly boosted e-commerce sales for luxury brands.
4. Success of Luxury Brands in the South Korean Market:
- Evidence: Moncler reported a doubling of its revenue in South Korea in 2022 compared to 2019. The Richemont Group, which owns brands like Cartier and Van Cleef & Arpels, has also seen a substantial increase in sales in the country.
5. Integration of South Korea's Entertainment Industry with Luxury Brands:
- Evidence: The article highlights the collaboration between luxury brands and South Korea's entertainment industry. An example is the partnership between Dior and BTS star Jimin, who was appointed as a global brand ambassador. This move solidifies Jimin's friendship with Dior and strengthens the bond with the artistic director of menswear, Kim Jones.
6. Role of Celebrity Endorsem*nts in the South Korean Luxury Market:
- Evidence: The appointment of BTS star Jimin as a global brand ambassador for Dior exemplifies the trend of luxury brands leveraging South Korea's massive entertainment industry to enhance their sales and brand image.
In conclusion, South Korea's booming luxury market is shaped by a combination of economic factors, societal attitudes, the impact of COVID-19, and strategic collaborations with influential figures in the country's entertainment scene. The evidence presented in the article underscores the remarkable growth and influence of South Korea in the global luxury goods landscape.
