South Koreans Hallyu over luxury goods
Photo by Aleksandar Pasaric from Pexels
South Korea has been the topic of discussion for several reasons mainly K-pop. The Korean hallyu (Korean wave) has taken up the globe in its hands. Ever wondered what trends are going on inside this trending nation?
Trends of South Korea
South Koreans are known to follow trends. A single post on their SNS can go viral overnight and before the sun rises the next day, all are neck-deep into the trend. A very recent trend that swallowed up the whole nation was the mint Choco trend. Shops offering varieties of mint Choco ice creams, cakes, doughnuts and even mint Choco flavored chicken was seen in every nook and corner of the country. Shops were constructed on temporarily only to sell varieties of mint Choco cuisines.
Actor Jun Ji-Hyun donning the YSL Lipstick in a K-Drama
The YSL (Yves Saint Laurent) lipstick that was worn by a well-known celebrity during the airing of a particular drama series sold out within the next 24 hours.
Studio apartments are in regular demand as the majority of South Korean youth have begun following the trend of living alone. Variety shows are been aired that follow the life of single living idols and other well-known personalities.
South Koreans follow trends like mandatory vaccine shots. The majority take them willingly like their life depends on it and a few others have a skeptical eye towards it, yet take the shot because everyone else did.
The frenzy over luxury goods
The purchase of luxury goods and brands is the new tendency seen within the nation. A compulsive buying of branded commodities can be seen everywhere in South Korea. A nation that breathes and breeds luxury goods.
Global brand names such as Chanel, YSL, Tiffany, Dior, Bulgari, Mac, Gucci, Prada, Nike, Armani, Louis Vuitton, Burberry, etc. have taken up a permanent slot in South Korea. They have hired global ambassadors from this small nation to become their face identity.
Why is this happening? Why are non-English speaking Asians from a small country becoming the source of revenue for these globally established brands?
Why this rush for luxury goods?
Historic reason
Historically the Japanese colonization followed by the Korean War brought about a change in the social class and this resulted in the loss of traditional high-class systems. It transformed the value of nobility. Showcasing of wealth became a necessity for the upper class in order to regain back their lost nobility. Purchasing luxury goods and flaunting it became the new symbol of high status. This proves that this current insanity towards luxury brands has always been in their blood.
Economic reason
On the economic front, people are taking into investing in luxury goods as an asset. The reason behind this is the hike in real estate prices. Since several natives prefer living alone these days, more demand for apartments has created a surge in prices. Seoul a metropolitan city that is home to almost half the population of South Korea saw a hike in prices.
The rates doubled this July reaching a massive 500 million won (around $413,541).The buyers would require a minimum of 300 million won (around $248,125) to consider purchase.
Social reason
Socially the value of western products and imitating the lifestyle of the rich class has everything to do with the purchase of luxury goods. Students and youth, who are unable to afford these expensive brands, even work part-time to purchase a Gucci bag worth three months of salary. Peer pressure in schools, colleges, and offices also leads even the poor to purchase such luxuries.
Psychology studies have proven that most consumers do not act rationally when shopping. (Study link)
Cultural reason
The Culture of South Korea has a major role to play in this game of purchasing luxury goods. The main focal point of the culture of South Korea today is K-pop. To provide a simple example, when world-renowned BTS member Jungkook simply drank a lemon Kombucha drink by TEAZEN, the next week, the company ran out its stock. The sale of that particular drink rose by 500% within the first week.
The idol neither promoted nor advertised the product. All he did was drink it while the live was going on. One can imagine what would happen when these idols advertise a product.
Luxury brands ticket to South Korea
When a consumer buys a luxury brand that is endorsed by their favorite idol it is said that psychologically they feel closer to their idols and has a sense of achievement in promoting their brands. Gone are the days when luxury goods were endorsed by Hollywood celebrities alone. Several Korean celebrities has become the official global ambassadors for numerous luxury brands.
When G-Dragon a solo artist and a member of the group Big Bang was appointed as a global ambassador of Chanel back in 2017, their sales sky rocketed.
Celine received more traffic on their website when Lisa a Blackpink member endorsed their products.
Luxury brands has gone a long way as to even investing in these entertainment companies, because there is assured returns. L Capital Asia, the private equity arm of the French luxury brand LVMH, invested $80 million in YG Entertainment.
Bruno Pavlovsky, Chanel’s president of fashion said, “Today, South Korea is the most influential country In Asia, with its energy and creativity, its youth culture and the pop music and TV celebrities.”
Most luxury brand companies have realized by now that South Korea is a game changing position for them and has utilized it to the maximum. If the advertisements arose the desire to get hold of the product on someone sitting far across in America or India, then how would South Koreans ever resist the trend for luxury?
The issue of luxury goods
All is glitter and glamour until one looks beyond the dazzling red carpet. This hype and rush for luxury goods comes with its own cost. Almost all Korean banks provide with special credit card facilities to fund the buying of luxury goods. The pending credit card bill tops the already overflowing debt created by housing and educational loans.
Economic inequality
South Korea has one of the fastest growing income gap. The Korea Herald on August 2020 had posted the poverty rates of countries belonging to the Organization for Economic Co-operation and Development (OECD). South Korea was second highest in its income gap with 17.4% earning less than half the median household income.
Yet they can be seen walking around head to toe in luxury due to the aforementioned reasons. Since the chaebol (rich family) can afford luxury like free air, the economic disparity never affects them.
Local brands
Apart from the rising economic inequality in South Korea, another hot issue that has come up due to the frenzy for luxury goods is the poor sales of local brands and goods. Several small business owners had to close down their shops due to the lack of customers. Even after creating the look alike of the branded goods at same quality and cheaper rates, the turnout of those products were few to zero customers.
Family planning
Lack of family planning and investment is one among the biggest threat that South Korea is facing currently due to its addiction towards luxury goods. As mentioned earlier, most young adults of South Korea prefer living alone in luxury. This is not a trend that came up independently. It came up due to the lack of savings due to the splash of money over luxury goods.
Majority students, youth and adults has completely turned down the idea of saving, buying a house and getting married. This in turn is affecting the family scenario of South Korea. Birth rates has been depleting and will continue at a faster pace if this continues. In the long run, this could lead to the government having to take up well-planned and strict measures to ensure the population growth goes on.
Rising debt and loans
Several families are on the verge of debt and loans. Even nuclear families are unable to balance luxury and their basic needs together. Many are juggling it all together with credit card bills and loans on the watch out.
Conclusion
It is certain that South Korea is influenced by trends and would go to any lengths for it. With trends arising almost every day, South Korea is definitely open to changes. This might be an effective method. It is evident from the above provided information that idols have a power and grasp over their fans. With such an advantage within their native soil, certain issues could be faced head on with their help.
Example: - Idols can become the face of their own nation along with the international brands. Promoting small business and local brands can take the sales onto a completely new level. Government aided advertisements and community welfare campaigns can help in the process of better family and financial planning.
The government and Korean citizens can surely bring about positive changes if they decide to work together for the betterment of all!
References
Thesis paper by Youngseok Kim – Social foundation of luxury goods obsession in South Korea