Korea’s high-end product markets expected to grow further in next 5 years
Korean consumers’ love for luxury goods may have exceeded that of the Japanese, research found Wednesday.
Koreans consumed 5 percent of their per capita income on high-end products, compared to 4 percent of the Japanese, according to McKinsey & Company, a global strategy consulting firm.
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Customers walk out of the Louis Vuitton shop in Shinsaegae Department Store in central Seoul. (Park Hyun-koo/The Korea Herald) |
The company surveyed 1,000 Korean customers who spend more than 1 million won ($938) a year on luxury shopping. Of them, 200 were considered “luxuryholics” who spend more than 10 million won.
Of the respondents, 45 percent said, “Having a luxury item is no longer a special thing.” The figure has doubled from 21 of last year.
The research said that the Korean luxury market has increased 12 percent every year since 2006, with last year’s sales surpassing $4.5 billion.
As of April, the sale in department stores, the main channel for the sale of Korean luxury goods, soared almost 30 percent compared to the same period last year.
With the luxury spending becoming more prevalent among Koreans, their tastes have also been diversified and sophisticated.
Twenty-six percent of the respondents agreed that “I have come to prefer designers’ brands that make me special compared to others.”
Such changes in consumer behaviors led to the successful settlement of relatively new brands such as Miu Miu and Alexander McQueen here, McKinsey said.
“More Korean consumers are seeking designer goods that better represent their sophisticated and unique character more than ever. That may be in line with the efforts of many luxury companies that strive to develop limited or customized items,” said a McKinsey official.
Meanwhile, Korean consumers are becoming more sensitive to prices.
Compared to the consumers in the United States, Europe and Japan, Korean consumers are still believed to prefer to buy luxury goods on regular prices.
But a growing number of consumers here seek discounts and become active in Internet search for cheaper prices, the firm said.
Of the respondents, 40 percent said they search the Web before purchasing luxury good but they showed reluctance to online purchase.
“Korean consumers prefer to use online channels for information before purchasing high-end goods. Even though their online inquiry may not be directly linked to their actual purchase, it’s also true that the important of the Internet is getting bigger in consumer behaviors,” said another consultant in the Seoul office.
McKinsey predicted that the domestic luxury market would continue to maintain a rapid growth rate at least in the coming three to five years.
In a separate survey on 24 executives at luxury companies, 63 percent also agreed to the outlook.
By Lee Ji-yoon (
jylee@heraldcorp.com)
