South Korea has become one of the countries that spend the most money on luxury consumption

Total spending by South Koreans on personal luxury goods increased by nearly 24 percent year-on-year to $16.8 billion.

Investment bank Morgan Stanley estimates that South Korea’s total spending on personal luxury goods will increase by 24 percent in 2022 to reach $16.8 billion, or about $325 per capita.

According to Morgan Stanley claims, this is much more than the $55 and $280 spent per capita, respectively, by Chinese and American citizens. Luxury brands also highlighted strong sales in South Korea.

Moncler said its revenue in South Korea “more than doubled” in the second quarter from before the pandemic. Cartier owner Richemont Group said Korea is one of the regions where sales grew by double digits in 2022 compared to both a year and two years ago.

Prada said the Chinese restrictions contributed to a 7 percent drop in 2022 retail performance, while the fashion giant said the decline was “milded by strong performance in Korea and South East Asia.”

Morgan Stanley analysts explained that the demand for luxury goods amid South Korean buyers was driven by both an increase in purchasing power and a desire to take a social standing.

“The outlook and financial success may resonate more with consumers in South Korea than in many other countries,” analysts wrote in the report. A McKinsey survey found that only 22 percent of Koreans, 45 percent of Japanese, and 38 percent of Chinese respondents thought showing luxury goods was distasteful.

The increase in household wealth also supported the demand for luxury goods. Bank of Korea information shows the country’s household net worth rose 11 percent in 2021. About 76 percent of household wealth in Korea is in real estate, whose prices have increased significantly since 2020.