More rich younger Koreans are showing off their wealth by buying supercars costing more than W100 million (US$1=W1,350). Purchases of supercars by Koreans under 40 have quadrupled over the last five years while sales of imported cars overall have risen only 16 percent.
Supercars are taking over streets beyond Gangnam in Songdo near Incheon and Hwaseong and Dongtan south of the capital. A similar trend is happening in high-end electronics and luxury goods.
Industry watchers say conspicuous consumption once confined to the super rich is spreading among younger people who make their money from private crammers or new media or by investing in stocks, real estate and cryptocurrencies. On Instagram, whole communities of young rich people have sprung up displaying their ostentatious wealth.
According to the Korea Automobile Importers and Distributors Association, 2,886 people under 40 bought luxury cars in the first nine months of 2019, and 621 lived in Gangnam. But this year their number surged 321 percent to 12,162, and only about 1,200 lived in Gangnam, while 345 lived in Incheon, 335 in Hwaseong, Gyeonggi Province and the rest were scattered elsewhere.
Incheon’s Songdo is where Samsung Biologics, POSCO Engineering, Kolon Global and other cutting-edge firms have set up their headquarters over the last decade. The average age there is just 40.8.
The situation is similar in Hwaseong, which attracted many young workers at Samsung Electronics, Hyundai and Kia and where the average age is 38.8.
The head of one luxury foreign automaker’s Korean branch said, “Employees of major conglomerates who don’t work in Seoul have a lot of disposable income since apartment prices are cheaper there. They often express themselves through flamboyant cars, so we’re targeting them as key customers.”
Retailers are also eyeing these conspicuous consumers. The most profitable branch of Hyundai Department Store is not the main store in the affluent Apgujeong-dong area in southern Seoul, but the Pangyo store in Seongnam, which achieved sales of W1.45 trillion last year. Around half of the mall’s customers are in their 20s and 30s and employed by IT companies based in the neighboring Pangyo Techno Valley.
Hyundai Department Store now runs VIP lounges only in Pangyo and Seoul’s financial district of Yeouido.
Lotte Department Store’s Dongtan branch in Hwaseong saw sales jump 90 percent in 2022 to W447.5 billion.
At Shinsegae Department Store the proportion of VIP customers in their 20s and 30s rose from 18 percent in 2019 to 25 percent in 2022.
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