Decoding South Korea’s high-spending Gen Z luxury consumer

This article is part of our Vogue Business Membership package. To enjoy unlimited access to Member-only reporting and insights, our NFT Tracker, Beauty Trend Tracker and TikTok Trend Tracker, weekly Technology, Beauty and Sustainability Edits and exclusive event invitations, sign up for Membership here. When Parisian luxury leather brand Polène opened the doors to its first South Korean store earlier this month, CEO Antoine Mothay spent several days immersed in Seoul in an effort to get to grips with its new customer base. What caught his eye were the young people strolling into the Gangnam-gu district outlet. “Nearly every young customer who visited already owned luxury bags, shoes or clothing,” Mothay says. They demonstrated “impressive knowledge of luxury brands, showing a strong affinity for new collections and emerging labels”. South Korea’s young people now make up some of its most committed luxury fashion aficionados. Despite having a population smaller than Kentucky, the East Asian country now spends close to $17 billion on luxury goods each year, according to Morgan Stanley — far surpassing Chinese consumers’ per capita spend — and millennials and Gen Z are responsible for a sizable chunk of that. According to a survey of 7,000 adults by Korean customer experience platform Lotte Members, nearly half (43 per cent) of all luxury goods consumers in South Korea in 2023 were in their 20s or 30s. As a growing number of luxury fashion labels look to cement their status in the country — drawn by the allure of billions of dollars in combined sales achieved by three top brands, Hermès, Louis Vuitton and Chanel (the trio dubbed ‘Her Lou Cha’ by locals) last year — they’ll need to find a way to engage with its high-rolling youth. So, who exactly are they? Seeking newness alongside classic luxury Younger Koreans’ interest in high-end fashion reflects the difficult economic circumstances they’ve grown up in, says Rachel Choi, behavioural analyst at consumer insights agency Canvas8. “Amid financial uncertainty, low economic growth and a hyper-competitive job market, young Koreans are giving up on saving to meet traditional milestones — marriage, buying a home, starting a family — for shorter, dopamine hits that come with shopping gratification,” she says. “They’re opting to live in the moment versus planning for the future.” Their choice to channel this disposable income into luxury goods reflects South Korea’s “flex culture”, she adds, in which openly displaying prestige purchases to confer status is far more socially acceptable than in markets like China or the West. This mindset is shifting across younger generations, points out Sola Park, South Korean-born podhost of ‘Womansplain’, which explores the intersection of trends in consumerism and venture capital within luxury, fashion and food. “With Gen Z, conspicuous consumption is less en vogue, influenced both by heightened conversations and awareness surrounding sustainability,” she says. This means that while young South Koreans are buying classic luxury pieces, like the Chanel flap or the Dior Lady, they also want to see “a bona fide purpose and story behind a brand”, Park adds. “[Young consumers] want to connect with the brand even if the brand is new and not ‘classic luxury’,” she continues. This mindset has seen contemporary Western brands like Reformation and Lululemon sit alongside classic luxury names such as Chanel and Louis Vuitton in high-end department stores across Seoul’s Gangnam district. “Now more than ever, the Korean consumer is excited about exploring new brands, especially brands whose authenticity is evident.” Quick to grasp new trends Viral trends sparked by social media and K-pop culture continue to sway the fortunes of luxury labels in South Korea, explains Sohyun Park, author of Luxury Brand Insight. Customers will go crazy over items worn by stars like Blackpink’s Jennie, she says. When the girl group member wore a two-piece from Vietnamese label L Seoul in an Instagram post in April, the brand announced it had sold over 2,000 sets in 15 minutes. Meanwhile, a pair of Prada boots photographed on BTS member Jungkook, a Tom Ford suit worn by his bandmate V and a Gucci ring worn by South Korean singer Exo Kai have all benefited from the same Midas touch. It’s something that Korean brand Andersson Bell discovered firsthand in 2019 when Jungkook performed wearing their sneakers — and sent sales soaring overnight. The brand has since become a global export, debuting at Milan Fashion Week last year. “We appreciate their high level of communication through social media and online communities,” says creative director Dohun Kim. “Luxury brands almost have to collaborate with [these] celebrities to be successful, finding an ambassador that embodies the image of a high-end luxury fashion brand and have aspirational lifestyles they want to emulate,” says Alison Ho, strategist at WGSN Insight. In 2023 alone, more than 30 K-pop idols were named global ambassadors for luxury brands. Craving novel experiences As one of the most connected generations on the planet — the average South Korean spends 27.7 hours online per month, according to educational website World Atlas — young Koreans expect a strong e-commerce presence from fashion brands, says Choi. Demand for online luxury fashion has seen a battle for dominance break out between two of the region’s biggest retail powerhouses. In January, SSG.com, operated by Shinsegae Group, announced plans to partner with global luxury e-commerce platform Net-a-Porter to make a portion of its inventory available in South Korea, while in the same month Coupang completed its acquisition of Farfetch. That doesn’t leave bricks-and-mortar obsolete, however. Young locals still frequent major department stores, points out Park. But it does require retailers and brands to rethink these physical spaces and “invest in experience-driven strategies steeped in leisure, wellness and entertainment to make an impact with a younger generation of luxury-savvy shoppers looking for novel experiences beyond the transaction”, advises Ho. In 2023, when Prada Mode, the label’s social club concept, coincided its programme of events with international art fair Frieze Seoul, for example, it set up a series of screenings, performances, talks and other activities to spotlight local curators, artists and chefs. In January, Louis Vuitton kicked off its fourth round of running gourmet pop-up restaurants in Seoul, recruiting renowned Korean chefs to serve up “an authentic, gastronomic experience that puts Korean culture, history and national pride at its forefront”, according to the brand, in the affluent Cheongdam-dong neighbourhood. “Soft-selling environments steeped in culture and learning including branded art galleries, libraries and bookstores, which express brand heritage in unique ways, will also resonate with wealthier customers looking to differentiate themselves by building cultural capital,” Ho adds. For new arrivals in the country, like Polène, satisfying South Korea’s young shoppers can be a steep learning curve. “We must be innovative, creative, and compelling,” says CEO Mothay. “This demographic values both product quality and the immersive in-store brand experience.” But he welcomes the challenge. “Our move into South Korea is not just about expansion; it’s about engaging with a market that appreciates and inspires our creativity, and where we can continue to push the boundaries of luxury fashion.” Shaped in no small part by South Korea’s highly influential youth. Comments, questions or feedback? Email us at feedback@voguebusiness.com. More on this topic: Luxury should not overlook the aspirational customer, Bain report says Bag charms and brooches are back as luxury’s new entry point Understanding luxury in South Africa

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