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By Kim Jae-heun
Koreans were found to have spent the most per capita on high-priced bags and other luxury goods, according to a report by Morgan Stanley.
The global investment bank said it estimated that Koreans' total spending on luxury items grew 24 percent to $16.8 billion (208.6 trillion won) in 2022 from a year ago, which is about $325 per person. The per capita figure is far more than the $280 and $55 spent by Americans and Chinese, respectively.
Morgan Stanley analyzed that the high demand for luxury goods among Koreans comes from their increased purchasing power over the years and desire to flaunt their social standing by wealth.
"Appearance and financial success can resonate more with consumers in South Korea than in most other countries," a Morgan Stanley analyst wrote in the report.
A global consulting firm McKinsey's survey also showed only 22 percent of Korean respondents thought it was in bad taste to make displays of wealth, which is comparatively lower than 45 percent of Japanese respondents and 38 percent of Chinese respondents who do.
"Koreans do not like falling behind fashion trends. So when there is a popular brand or hot item, everyone goes after it. Also, they do not like being left out and not wearing what everyone else is wearing. I think this social trend is forcing even those who are not interested in luxury goods to purchase them," a local fashion firm official said.
Luxury firms advertising their products by hiring Korean celebrities as their ambassadors have played a role too.
"Nearly all of the major Korean celebrities are brand ambassadors of the leading luxury houses," Morgan Stanley's report said. K-pop star Jennie of BLACKPINK and rapper G-Dragon are global ambassadors of French luxury brand Chanel and so is actor Lee Min-ho for Italian luxury fashion house Fendi. BLACKPINK member Rose was the face of Dior's HardWear collection, which the fashion house said doubled its sales for the line.
Most global luxury brands have been strengthening their sales networks in Korea. Cartier owner Richmont Group said that Korea has been a leading market, with double-digit sales growth in 2022, year-on-year.
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