South Korea reportedly leads the world in per capita spending on personal luxury items.
South Korea’s spending on luxury goods reached $16.8 billion in 2022, a figure that was 24% higher than the year before, according to the report.
The growing demand for luxury items in the country has been driven by consumers’ rising purchasing power, Korean celebrities promoting luxury brands and a desire to display one’s wealth, Morgan Stanley analysts said in the report.
“Appearance and financial success can resonate with more consumers in South Korea than in most other countries,” they said, per the report.
Morgan Stanley did not immediately reply to PYMNTS’ request for comment.
PYMNTS research has found that both the luxury market and the eCommerce market have grown in South Korea because the country is a titan in the world economy and is on the cutting edge of technology, finance, automotive and retail.
Foreign luxury goods are a hot commodity in the country, and the category’s sales growth has been driven by pent-up demand that had built up during the pandemic, according to the August 2022 edition of the “Global Commerce Tracker®,” a PYMNTS and Worldline collaboration.
The eCommerce merchants are right to be sizing up South Korea for expansion because it is prime territory for cross-border growth, but they must play to local preferences, Worldline Global Head of Digital Goods and Services Michael Bilotta told PYMNTS’ Karen Webster in an interview posted in July 2022.
“If you’re not offering those local payment methods, [but] then one of your competitors [is], or even if somebody that’s in a slightly different space is also offering them, the customer is going to gravitate toward the options that will allow them to utilize those payment methods,” Bilotta said at the time.
Luxury retail has been growing around the world as well. As PYMNTS reported in October, luxury retailers and brands have been reporting earnings that show that the world’s wealthy have an appetite for luxury and the means on hand to buy it.