Stressed Koreans cut costs at home but flex on luxury items
Covid-19 is changing consumption patterns, often in unexpected ways. As the pandemic continues, an increasing number of Koreans are splurging on luxury goods while simultaneously cutting down costs of daily necessities.
The two contrasting consumer sentiments are shown in the growing demand for both cheap bulk packs of household goods, like shampoo, at the same time as extravagant goods, such as high-end watches. This tendency is seen as a reflection of people looking for a bit of retail therapy to break the stress of the pandemic at the same time as trying to cut costs in everyday life.
People are coping with stress and depression by flexing on expensive items — essentially buying things to show off and feel good about themselves.
There is data to back up this paradox. According to e-commerce site Gmarket on Wednesday, sales of affordable and pricey items both rose over the past month. The tendency toward saving can be seen in sales of daily necessities and food — categories where there are lots of options and it is therefore relatively easy to try and cut costs.
Over the last four weeks, sales of large packs of detergent rose by 31 percent on year. Bulk-buying body care products rose by 10 percent and hair treatment by 26 percent. Since both items can be used over a long period of time, demand is high among one- and two-person households.
The spike in demand for reusable silicone wrap increased by almost 200 percent, while washable kitchen towels rose by 41 percent. Consumers are also inclined to buy refurbished items, which are products that have been returned to the manufacturer or vendor. During the same period, sales of refurbished home appliances and other digital products, including PCs, almost doubled.
Affordable food items have been selling consistently, as people have been spending more time at home. Sales of large bags of rice have more than quadrupled. Due to an especially long wet season this year resulting in a spike in grocery prices, imperfect produce also sold well. On Gmarket, sales of imperfect vegetables rose 70 percent and fruit rose 42 percent.
Emart has also been running a promotion offering cheaper prices for pears and apples that are as fresh and sweet as regularly priced ones, but with less appealing shapes. These pears are 50 percent cheaper, while apples are 25 percent cheaper. Emart is planning to sell a total of 2,500 tons of imperfect apples and pears. These affordable alternatives have proven popular as they also help farms affected by the harsh rainy season.
Yet at the same time as all this bargain hunting, luxury goods have been selling well both online and offline.
Sales of luxury watches on Gmarket marked a 126 percent on-year increase. Clothes from high-end brands saw a 17 percent increase in sales, while sales of other luxury merchandise rose by 31 percent.
Selling luxury products from duty-free stores, which started to be available to regular customers from July, were a big success. Hordes of people lined up for offline events at department stores from the break of dawn, while servers often broke down during duty-free stores’ online events.
People are also spending a lot on their hobbies.
Most of the categories under leisure saw a double-digit percentage growth. Sales of golf equipment rose by 14 percent, and sales of camping equipment by 22 percent. Despite the long monsoon season this year, fishing equipment sales also increased by 4 percent.
The premium home appliance market has also seen rapid growth. Sales of clothing care machines, dishwashers and capsule coffee machines all saw significant jumps in sales.
“The coronavirus pandemic’s effect on consumption patterns has been combined with the you-only-live-once [YOLO] trend, which has settled in the mainstream culture,” said a Gmarket spokesperson. “This pattern is expected to continue until the pandemic lets up and economic recovery begins.”
BY JEON YOUNG-SUN [email@example.com]