Young people continue to spend big despite pandemic

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Young people continue to spend big despite pandemic

YouTube videos show young Koreans spending tens of millions of won for buying high-end products. [SCREEN CAPTURE]

YouTube videos show young Koreans spending tens of millions of won for buying high-end products. [SCREEN CAPTURE]

 
The Covid-19 pandemic might have tempered the pursuit of the “You Only Live Once” (YOLO) lifestyle as many young Koreans instead saved their pennies for FIRE, or “financial independence, retire early.”
 
However, recent data suggest that young adults haven’t reduced their spending.
 
And for some young adults, the pursuit of happiness means imitating social media influencers and willingly paying extra to get what they want.
 
Twenty-one-year-old college undergraduate Kim Min-ji saved money for five months to buy a pair of fashionable Jordan sneakers at 310,000 won ($238).
 
Though the shoes were a resale product with a 170,000-won premium added to the face price of 139,000 won, Kim was happy.
 
She is now balancing her books again to buy a high-priced bag.
 
“I watch influencers around my age take expensive personal training lessons each month and buy several high-end pieces of clothing in a single week,” Kim said.
 
This makes other students think it’s normal to make such purchases, she added.
 
The sales index for Koreans in their early 20s — between the ages of 20 and 24 — from 2019 to last year was 282.2, meaning they spent 2.82 times more money last year than they did in 2019, according to BC Card on Tuesday.
 
BC Card calculated the index based on the company’s credit and debit payments in Korea.
 
In fact, people in their early 20s have been spending more and more over the last several years — their sales index was 132.2 in 2020 and 202.9 in 2021.
 
Though not as free spending as people in their early 20s, people in their late 20s — 25 to 29 — spent 36.6 percent more last year than they did in 2019, while people in their 30s spent 10 percent more.
 
People in their 40s and older spent less during the Covid-19 pandemic, but even their spending has bounced back — their sales index was 93.5 in 2020 and 95.7 in 2021, but rose to 101.9 last year.
 
Experts note that people in their early 20s became adults during the pandemic, when remote and contactless content was dominant.
 
They entered society with more online and media experience than previous generations and took active part in online shopping — their sales index for online shopping was 644, the highest among all sectors.
 
“People who became adults during the pandemic increased their consumption in various ways online,” said Lee Eun-hee, a consumer science professor at Inha University.
 
General expenditures surged when social distancing measures were lifted last year and face-to-face spending returned, Prof. Lee added.
 
Young adults didn’t hesitate to spend on themselves.
 
The sales index for medical fees related to skincare and beauty rose to 393 last year from 268 the year before.
 
The sales index for department stores was 318, while the index for private education was 242.
 
Rising interest in style is driving the hike in related spending, such as shopping for clothes online and luxury goods at department stores, a BC Card employee told the JoongAng Ilbo.
 
Some people say social media is driving the spending.
 
Of the 924 people surveyed by Incruit, an online job seeking platform, 35.3 percent said social media encouraged greater spending on high-priced products and services.
 
Some 24.7 percent cited YOLO and 15.6 percent pointed to Covid-inspired revenge spending.
 
In fact, it’s not difficult to find YouTube videos of people who claim to be undergraduates or fresh out of high school spending tens of millions of won on luxury products.
 
“When I was a student 10 years ago, I went to Olive Young to buy a bottle of cologne,” said a 31-year-old with many colleagues in their 20s, adding that it’s surprising to see young people these days buy high-end perfume brands such as Jo Malone, Byredo and Diptyque.
 
Self-satisfaction may not be the only factor behind the higher spending, though, because consumer prices soared in sectors that young adults typically spend their money on.
 
Transportation costs last year rose 9.7 percent on year, while food and accommodation rose by 7.6 percent, groceries by 5.9 percent and clothing by 3.1 percent.
 
Except for clothing, the rest were above the overall average increase of 5.1 percent.
 
“Young adults are taking a direct hit from rising living costs as this year’s inflation focuses on sectors where they consume the most,” the Federation of Korean Industries said in a report announced at the end of last year.

BY IM SOUNG-BIN [sohn.dongjoo@joongang.co.kr]
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