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Whether it’s calf-leather Italian Prada bags or classic, chequered British Burberry trench coats, South Koreans are the world’s biggest spenders on personal luxury goods per capita, Morgan Stanley said.
The investment bank estimated South Korean total spending on personal luxury goods grew 24 percent in 2022 to US$16,8 billion, or about US$325 per capita. That’s far more than the US$55 and US$280 per capita spent by Chinese and American nationals, respectively, according to Morgan Stanley estimates.
Moncler said its revenue in South Korea “more than doubled” in the second quarter compared with before the pandemic. Cartier-owner Richemont Group said Korea was among the regions where sales grew by double digits in 2022, compared with both a year and two years ago.
While Prada said China lockdowns contributed to a 7 percent decline in 2022 retail performance, the fashion house said the drop was “mitigated by the strong performance in Korea and South East Asia.”
Morgan Stanley analysts explained the demand for luxury goods among South Korean buyers is driven both by an increase in purchasing power as well as a desire to outwardly exhibit social standing.
“Appearance and financial success can resonate more with consumers in South Korea than in most other countries,” analysts wrote in the report.
Displays of wealth are also more socially acceptable in Korean society. A McKinsey survey found that only 22 percent of Korean respondents consider showing off luxury goods to be in bad taste, compared with 45 percent of Japanese and 38 percent of Chinese.
The demand in luxury wares was also supported by the increase in household wealth. — CNBC
Online Reporter