|Major department stores holding a sale of luxury goods are jam-packed with customers from morning till night. The designer-label bags and shoes are so expensive that even their cut rates often reach 1 million won ($850). Still supply cannot meet demand; so much so that the stores are competing to set up huge outlets on the outskirts of Seoul. Welcome to the land of brand-name tribes!
Koreans’ love of luxury items is no longer news. The sales of famous foreign brands at the three largest department stores _ Lotte, Hyundai and Shinsegae _ jumped 20 percent last year, as the economic slump is the story of another land for these high-end consumers.
As seen in the chaotic scenes at the discount sale, the addiction is spreading to people with median income. A McKinsey report showed Korean families spent 5 percent of their income on buying luxury goods last year, surpassing the comparable rate of 4 percent for Japan, the previous top consumer in this part of the world.
Consumption, sound or not, is necessary to bolster sluggish economy. As cheap as they are, vanity and exhibitionism are also a part of human nature.
But extravagance should have its limits. All the more so, as an extreme imbalance of wealth is emerging as a symbol of global capitalism. Conspicuous consumers need to stop and think how the so-called 880,000-won generation of young, part-time workers feel as their monthly income cannot even buy one brand-name handbag. This is especially problematic in Korea where many rich people, mainly because of their less than fair means of amassing a fortune, are not respected but despised.
Brand-name makers are nothing if they don’t capitalize on Koreans’ near idolatry of things expensive and foreign.
These expensive brands even apply a ``dual pricing” system between their sales at home and in other advanced markets, and those exported to Korea and China. Add to this the notorious distributors’ margin here, and the prices for the same product can be as high as four times here as abroad. Sadder still, in what is seen as another example facilitating economic polarization, taking the lead in these exploitative marketing are the importers and sales outlets affiliated with family-run conglomerates.
Large department stores not just garner handsome profits riding on the brand-name fervor but also apply much lower rents to the global brands than they receive from the small- to medium-sized domestic makers, killing the latter twice _ first in manufacturing, and second in distributing. This is more than regrettable, considering these mostly European brands must have started as small, family businesses and have grown with the support of their governments and consumers.
The Fair Trade Commission will need to keep a close watch on possible distortion of distribution channels in this one-sidedly sellers’ market, and rectify problems when they are found.
Eventually, however, the fundamental remedy lies in consumers’ self-awakening from this nouveau riche snobbery. Low self-esteem can never be compensated for with material goods. The rich in the West have reportedly long ceased to wear or carry goods with designer-brand logos. Why make them earn money and be laughed at from behind?
2월 14일 (화) The Korea Times 사설