Sales of Luxury Goods Rebound
By Jane Han
Staff Reporter
What makes shoppers feel the best when spending money? Knowing that their assets are piling up while they're spending, one of the sentiments that push up consumption during good economic times.
And it seems like South Korean consumers are being boosted with such an assurance, as sales of luxury goods are showing signs of rising again on the heels of improving stock and real estate market conditions.
Whiskey sales have been sharply falling throughout the first half of this year, as people opted for cheaper drinks over the expensive liquor. However, government data showed Wednesday that the rate of decline drastically slowed last month, signaling that consumers are turning to imported products again.
The same data indicated that imports of cosmetics, video cameras and other non-essential goods are beginning to turn around.
Sales data from the country's leading department stores point to a similar trend, as their high-end goods sales edged up last month after several months of weak figures.
Lotte Department Store's 25 outlets nationwide posted a 14.3-percent year-on-year growth in August, while its rivals Hyundai and Shinsegae recorded similar sales increases.
Imported luxury goods and cosmetics led the jump, said Woo Kil-jo, a Lotte official, who added that months of frigid consumer confidence appears to have thawed, thanks to recent positive economic indicators.
Moreover, prices of real estate and stocks ― popular personal investment choices ― have significantly advanced in recent weeks. The benchmark KOSPI index went up 44 percent this year, while property prices increased by 0.13 percent from January to August, according to Dr. Apartment, a local real estate brokerage.
"People obviously feel better about spending when they know their money is adding up somewhere else," said Kim Hyun-wook, an economist at the Korea Development Institute, who explained that further improvement in consumer sentiment would help pull the economy through.