A seafood buffet restaurant in Gangnam, Seoul, was fully booked on Jan. 12, with all 100 seats occupied from 5:30-8 p.m. Known for being so popular that reservations are hard to come by, even months in advance, the restaurant charges $200 per person. This price fluctuates daily with the exchange rate. On Jan. 12, the cost was 263,000 won per person, or 526,000 won for a couple, yet finding an available seat was impossible.
Despite concerns about shrinking consumer spending due to high prices and the economic downturn, South Korea is witnessing a surge in ‘conspicuous consumption.’’ For instance, Bentley cars, averaging $222,499 (300 million won) each, saw 810 units sold in Korea last year, surpassing Japan’s 727 units. Sales of high-end watches and jewelry from brands like Constantin, Audemars Piguet, and Fred, often priced in the hundreds of millions of won, are also soaring. A report by the U.S. investment bank Morgan Stanley highlighted that Korea leads the world in per capita luxury goods expenditure, amounting to $325 (430,000 won).
Recently, the government revised its GDP growth forecast for this year downward to 2.2 percent from 2.4 percent, attributing the revision to weakened private consumption. However, the luxury consumer market tells a different tale.
This trend of conspicuous consumption extends beyond a wealthy few. Average consumers are stretching their finances to keep up. For example, in October last year, 80 percent of the pre-orders for one carrier’s iPhone 15 were for the high-end model, priced over $1,121 (1.5 million won), rather than the basic version. This consumption pattern is escalating into a societal issue, with some individuals incurring debt and others postponing or opting out of having children to afford these luxuries.
Professor Suh Yong-gu from Sookmyung Women’s University observes, “The traditional ‘average consumption behavior,’ where spending aligns with income, is fading. Instead, a trend of extreme consumption, surpassing reasonable limits, is intensifying.
