All studies of the markets highlight the fact that the luxury markets are registering growth, somewhat unexpectedly, thanks to the emerging markets in Asia. The reports are basically centered around China with India bringing the rear up. Unfortunately the hype built around China and India overshadows the robust growth achieved by the luxury goods market of South Korea. McKinsey & Company has taken up a detailed study of the market there and there report is an eye opener for those who have overlooked South Korea so far.
The last few years have been particularly good for the luxury goods in South Korea. The sales have sky rocketed as the South Koreans now spend more on high end goods than their Japanese counterparts. It has helped the sales of luxury goods there to record 12% growth every year to reach $4.5 billion in 2010. According to McKinsey, this fast paced growth is sustainable over a 3 to 5 year period. The growth is particularly strong among the super rich consumers. Luxury for them has become a habit and they are spending more on luxury goods across all categories.
The other segment of the consumers that is driving this growth is the youth. Young Koreans are buying more luxury goods. The women in Korea are joining the workforce in larger numbers. With more money in their hands, they are making more luxury purchases. The Korean consumer today is not going only after the label or the logo but buying items that can make them stand out in a crowd. The luxury goods sale used to be concentrated in Seoul but is spreading out to other cities now. The Koreans have become more price savvy but there is a lot of potential for growth in the field of online shopping.