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Sales of luxury goods there have skyrocketed in recent years, and new research from McKinsey & Company shows that luxury consumers spend more on high-end goods in South Korea than they do in Japan.
We’ve compiled some extraordinary facts about why the luxury goods market in South Korea is so hot, taken from McKinsey’s 2011 luxury consumer survey (download a copy here).
Sales of luxury goods in Korea have risen at least 12% every year since 2006, to reach around $4.5 billion in 2010.
The luxury market is growing quickly, but it appears that growth will be sustainable over the next 3 to 5 years.
Young Koreans are buying more luxury goods. More than 1/3 of people under 35 said they bought more luxury items than in the past, while just 18% of people over 50 said the same.
More women are entering Korea's workforce, meaning they have money to spend. That's good news for retailers, since women make 90% of luxury purchases.
Korea's perspective on luxury items is also changing. Consumers now want items that make them stand out in a crowd, instead of stuff with conspicuous logos.
Seoul's position as the sole point of luxury retail is fading, as the country's major department stores plan new locations outside of the city.
Koreans also becoming more price-savvy. They have started buying more luxury items on sale, especially shoes and apparel.
One area with major growth potential is online shopping. While 40% of Korean shoppers browse online, they mainly do so before buying in person.
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