From Chanel bags to Rolex's, luxury goods have long been a popular purchase for consumers around the world, and this trend shows no sign of slowing down.
Many countries have seen an increase in spending on luxury items, but one country now stands out as the world's biggest spender on luxury goods per capita: South Korea.
According to analysts from Morgan Stanley, South Korea's spend on luxury goods saw a 24% increase in 2022 to €15.4 billion or about €300 per capita.
That's far more than the €46 and €234 per capita spent by Chinese and American nationals.
This buoyant demand for luxury goods can be attributed to a number of factors, including an increase in purchasing power and a desire to display social status.
In Korean society, it is more socially acceptable to display wealth. According to a survey by McKinsey, only 22% of Koreans surveyed believe that flaunting luxury goods is in poor taste, while 45% of Japanese and 38% of Chinese respondents felt the same.
The South Korean luxury market has been growing steadily in recent years, and this growth has been accelerated by the COVID-19 pandemic. With many consumers opting to shop online, luxury brands have seen a significant increase in e-commerce sales.
The luxury craze in South Korea is more than beneficial for brands. Moncler, for example, reported that its revenue in South Korea more than doubled in the second quarter of 2022 compared to 2020. Similarly, the Richemont Group, which owns Cartier and Van Cleef & Arpels, among others, has seen a significant increase in sales in the Southeast Asian country.
In addition to the growing luxury market in South Korea, luxury brands are also tapping into the country's massive entertainment industry to boost their sales.
A prime example of this is the recent appointment of BTS star Jimin as a global brand ambassador for Dior.
Dior announced the partnership with Jimin via social media last month, stating that the appointment of the BTS star "solidifies" his friendship with the French label, and "continues a bond" with the artistic director of menswear, Kim Jones.
Kim Jones has previously designed stage outfits for the K-pop band, further strengthening the relationship between Dior and Jimin.