Korea is the biggest spender in the world on luxury goods
Celine Fall/Winter men’s fashion show 2023
According to Morgan Stanley estimates, Korea’s spend on luxury goods grew 24% in 2022 ($16.8 billion), becoming the biggest spender on luxury goods. It’s about $325 per capita. The United States’ spend per capita was $280 and China’s was $55.
Interestingly, the consumption of luxury goods in the 2-40s has increased.
The Open-Run Phenomenon
As Korea becomes the largest luxury goods market in 2022, this phenomenon has emerged over the past few years: Open-Run. It is what Koreans refer to as waiting in line before the store opens.
It especially happens in the luxury goods market and pop-up stores. Some people even bring chairs and tents with them to pull all-nighters.
WHY?
Of course, there are many complex reasons behind it. Here are some of them.
1) Luxury goods are often associated with social status in Korean culture. The possession of luxury items can represent wealth and success, which can be highly valued in Korean society. Koreans are known for their love of fashion and style.
2) Koreans are known for their love of fashion and style.Luxury brands offer a wide range of high-quality, fashionable products that appeal to Korean consumers’ tastes and preferences.
3) FOMO (fear of missing out). As more and more people consume high-priced, luxury brands, others feel pressured to follow the trend.
Doesn’t it sound like young Koreans are financially independent and make a lot of money?
Many Koreans in their 2-40s buy luxury brands like Channel, Dior, Louis Vuitton and eat out in high-end restaurants. Does that mean young Koreans are financially independent and rich?
Yes and no. There are people like that, but very few. Others are just ordinary young adults.
We will introduce some of the keywords that may demonstrate the other side of young adults in Korea below.
1) No-Spend Challenge
“Luxury goods” was a big keyword for 2022. Ironically, another keyword was “No-Spend Challenge (무지출 챌린지)”. It’s a challenge to live with minimum consumption within one’s budget that went viral among those in their 2-40s in 2022. In the extreme, some people aimed for “0” consumption.
2) Kangaroo Tribe
It refers to those who are financially dependent on their parents, living in a same house, even when they graduated from college and are old enough to move out (캥거루족 in Korean). According to analysts from Office for Government Policy Coordination, 60% of people in 19-34 live with their parents, and 68% of them said they have no plans to move out.
3) Car Poor
Some people decide to choose a luxury car over everything they have. We call them “Car Poor (카푸어)”. It’s a term for those who have difficulty living their life due to buying and maintaining an expensive car, usually imported cars. Many of them have to pay monthly installments and do side hustles.
FAQs
Experts say the cash challenge has gained momentum as young Koreans look for ways to curb spending amid a cost of living crisis. This trend aligns with the recent surge in budgeting hacks, including the “no-spend challenge”, which involves refraining from spending for a chosen period.
What is the world's largest luxury market? ›
China is expected to become the world's largest personal luxury market, with a market size of US$148 billion in 2030. Hong Kong, 15 April 2024 – PwC released its Mainland China and Hong Kong Luxury Market report at the fourth China International Consumer Products Expo.
How much do Koreans spend on clothes? ›
Monthly household spending on fabric and outer clothing South Korea 2017-2023. In 2023, households in South Korea spent an average of around 100.76 thousand South Korean won on fabric and outer clothing. In total, around 139.2 thousand won were spent on clothing and footwear.
Which luxury brand is most popular in Korea? ›
In 2021, Louis Vuitton was the most popular luxury goods brand in South Korea, reaching a sales share of over 31 percent. Chanel came in second, with a little over one in four luxury goods purchases being made from the brand.
What is the 50 30 20 rule? ›
The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals. Let's take a closer look at each category.
Can you not flush toilet paper in Korea? ›
You have to flush toilet paper. It's water-soluble so there's no need to worry about clogging. But other bathrooms in restaurants and cafes usually ask people to throw toilet paper into the trash can due to low water pressure. You can often see a notice on the bathroom walls.
What are the big 3 in luxury? ›
The Trinity or 'big three' is a nickname given to the most luxurious watchmaking brands in the world. At the top of their game, the three watchmaking companies are Audemars Piguet, Vacheron Constantin and Patek Philippe.
Which country has most luxury? ›
1- Switzerland
The cost of living in Switzerland is high, the anticipated monthly expenses for a family of four are CHF 7,078 and CHF 4,190 for an individual. These figures are not surprising given the country's reputation for being one of the most expensive in Western Europe and the world.
What is the richest luxury brand in the world? ›
LVMH (Louis Vuitton Moet Hennessy) was the most valuable luxury brand in the world, with a brand value of about 130 billion U.S. dollars in 2024. The LVMH Group's total revenue for the 2023 fiscal year was about 86 billion euros.
What do Koreans value the most? ›
In addition to valuing family above anything else, Koreans also place high importance on status and dignity, and every action of an individual is said to reflect back on one's family, company, and country.
The investment bank estimated South Korean total spending on personal luxury goods grew 24% in 2022 to $16.8 billion, or about $325 per capita. That's far more than the $55 and $280 per capita spent by Chinese and American nationals, respectively, according to Morgan Stanley estimates.
What is considered a lot of money in Korea? ›
Amount of assets to be considered wealthy South Korea 2023
According to a survey conducted among male and female adults in South Korea in 2023, about 27 percent of respondents considered having one billion South Korean won or more in household assets as being wealthy.
What is the No 1 brand in Korea? ›
With a brand value of over 82.7 billion U.S. dollars, Samsung was the most valuable South Korean brand in 2023, greatly surpassing Hyundai, LG as well as SK Hynix.
Which skincare brand is famous in Korea? ›
Illiyoon. If dry skin is among your top skincare concerns, Illiyoon should be on your radar. Its affordable Korean skincare products are packed with ceramides that work well for dry, sensitive and acne-prone skin. Even better, they're made without added (potentially irritating) dyes and fragrances.
What branded bags to buy in Korea? ›
Discover the vibrant world of Korean bag brands, offering top-notch quality at affordable prices. Brands like Samo Ondon, Find Kapoor, Roh Seoul, Archivepke, and Osoi showcase a diverse range of designs from minimalist chic to Y2K retro.
How does the no spend challenge work? ›
The No-Spend Challenge isn't giving up all spending, again it's nonessentials. You need to pay the bills and buy important things that pop up (like groceries or school supplies, or even a new heater if yours goes out). The goal is to challenge yourself to only spend on the essentials.
What is the zero spend method? ›
What is zero-based budgeting? Zero-based budgeting is a method that has you allocate all of your money to expenses for needs and wants, as well as short- and long-term savings and debt payments. The goal is that your income minus your expenditures equals zero by the end of the month.
How do South Koreans spend their free time? ›
The Korean Way of Going on Holiday
Koreans often escape the bustling city life by visiting the countryside or campgrounds with their families. Young people enjoy leisurely tours that start in 'pocha,' or Korean bars, and end in karaoke. TV shows, movies, and doramas also play a significant role in their leisure time.
