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15 January 2023
Luxury spending leaps in South Korea
Luxury brandsLuxury purchase behaviourSouth Korea
South Korean consumers are the world’s biggest per capita spenders on personal luxury goods, according to data from investment bank Morgan Stanley.
Last year, total spending on personal luxury goods grew by 24% to reach $16.8bn, said a report on CNBC.
On a per capita basis, that works out at $325 per person, compared to $280 in the US and $55 in China.
Luxury brands such as Moncler, Cartier and Prada have reported significantly increased sales in Korea over the past two years, helping to offset any decline in sales in China.
Increased purchasing power is one aspect of increasing demand, but Morgan Stanely also suggests overt displays of wealth are more acceptable in South Korea than in, say, Japan or China.
Luxury brands have successfully tapped celebrities as brand ambassadors; Dior, for example, reported that sales of its HardWear collection doubled when Blackpink singer Rose became the face of the brand.
Why it matters
Per capita consumption as a metric is arguably meaningless, given that a large part of the population are never going to be in the market for luxury goods. One observer suggests basing the figure on the number of consumers who are middle class and above, rather than the total population.
Nevertheless, the year-on-year increase points to a thriving market. It’s a “good preview”, says Morgan Stanley, of what the Chinese luxury market could become.