Consumer Behaviors in South Korea

JUNE 22, 2018

I have been studying the Korean language, culture, and economy for some time, and have been interested in understanding their consumerism and buying habits and how that may differ from the United States. The mixture of collectivism and increase of wealth in Asia have influenced the South Korean market greatly and promoted a mass influx of luxury buying in the country.

South Korea is a homogeneous country with a very heavy focus on collectivism. They prefer interdependence over independence and follow group patterns. Consumer-wise, they prefer to follow the same trends and buy the same things. They don’t like to stick out from the crowd or differentiate themselves from others too drastically. For example, Hyundai Motor Company reported that nearly 90% of cars purchased by Koreans are white, gray, or black. Of those, most are Hyundai and Kia cars.

Similarly, there was a trend in South Korea in which everybody wore a long black winter coat. Almost every single person on the street had the same coat on. Well, almost the same. The only difference was the brand of the coat. While, in the United States, brand logos are on the front of the jacket, so you can see it when you look into a mirror, in South Korea brand logos are on the back of jackets so other people can see what brand you are wearing. They want to display a prestigious brand to tell people that they can afford a luxury coat just like the next person. This is both a way to compete with their neighbors and show a bit of uniqueness without having the risk of standing out too much.  

The increase of desire for luxury products can be attributed to the steady rise of the country’s wealth as well as the increase of global influence on South Korea.  Displaying a brand that is both luxurious and globally recognized is the pinnacle of so western brands have been making a huge impact in Korea. Only 5% of Koreans feel guilty about buying luxury goods – compared to 15% in other developed countries –  and only 22% think it is in poor taste to show – compared to 45% of Japanese people.

Department stores are the main place where consumers are making their purchases. Lotte and Shinsegae are just a couple of the huge shopping centers where over 70% of customers are buying their luxury goods. For those who cannot afford the higher prices of these centers, about 10% of consumers frequent the luxury outlets that the larger department stores have created, or simply find a local street vendor who offer mock luxury items.

The South Korean consumer market is substantial, and with over 25 million people living in the Seoul-metropolitan area, large numbers of people are getting exposed to foreign goods and trends. As the country further develops and its economy continues to grow, so will the consumer market. Tastes may change, but for now if you are a company looking to sell in Korea, have one clear brand and don’t get too crazy with your marketing or your style.