Korea : A ¡®Luxury Friendly¡¯ Spot?

Korea is emerging as one of the most ¡°luxury friendly¡± places in the world, influenced by its growing wealth and a rising number of tourists, according to a survey by global consulting group McKinsey & Co.

The survey which focused on people who have purchased luxury goods found that such products attract Korean shoppers more than in other countries.

Few Koreans feel guilty about spending money on luxury-brand items or think that they are wasting money on them, the survey showed. Only 22 percent of Korean respondents said they think that showing off luxury goods is a negative thing to do which is much lower than Japanese and Chinese respondents.

One reason for such result is South Korea¡¯s homogeneous culture, which both encourages people to distinguish themselves with high-end products and pressures others to do the same.

Additionally, there is a high respect for very fine products according to Aimee Kim, a McKinsey partner in Seoul who specializes in consumer markets. ¡°Some purchasers may have initially purchased a luxury item to be part of the trend, but after the first purchase, they notice a difference in quality.¡±

Despite the global economic crisis, shoppers in Korea and China in the McKinsey survey expressed in sizable numbers that they spent more this past year on luxury goods than before. About 46 percent of Koreans in the survey said they spent more in the past 12 months on luxury items than before, while 44 percent of Chinese said so. Those numbers were sharply higher than the single-digit rates for Japan, the U.S. and Europe.

Currently, Korea accounts for about 4 percent of global spending on luxury goods. Its rise has been slowed by the concentration of distribution on department stores and duty-free shops. But since last year, big luxury brands could operate stand-alone stores at new malls in Seoul and Busan.