South Koreans are Now the World’s Biggest Luxury Spenders
South Koreans are now the world’s biggest per-capita spenders on luxury goods according to Morgan Stanley. The report by the global investment bank showed that Koreans’ total spending on luxury items such as designer bags, clothes, watches, and cosmetics 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 spent by Americans and and $50 spent by Chinese.
Helping fuel the increase according to CNBC were huge surges in Korea’s real estate market, which saw double-digit growth in some cities during the pandemic, making homeowners feel wealthier. Even younger Koreans who couldn’t afford to buy homes seemed to splurge on luxury treats.
“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 actor Lee Min-ho for Italian luxury fashion house Fendi. BLACKPINK member Rose was the face of Tiffany’s HardWear collection, which the fashion house said doubled its sales for the line.
Displays of wealth are also more socially acceptable in Korean society. A McKinsey survey found that only 22% of Korean respondents consider showing off luxury goods to be in bad taste, compared with 45% of Japanese and 38% of Chinese.
Most global luxury brands have been strengthening their sales networks in Korea. Cartier owner Richemont Group said that Korea has been a leading market, with double-digit sales growth in 2022, year-on-year.
The trend in part is a reflection of a global increase in luxury spending, which has helped propel Bernard Arnault, the French tycoon behind luxury-goods powerhouse LVMH, to become the world’s richest person.