South Korea’s online luxury goods market has experienced a sharp decline. (Image courtesy of Yonhap)
SEOUL, Jul. 16 (Korea Bizwire) – South Korea’s online luxury goods market has experienced a sharp decline, with sales dropping by more than 30% in the first quarter of 2024 compared to the same period two years ago, according to recent data. This downturn is largely attributed to the impacts of high inflation and interest rates.
NH Nonghyup Card, a major South Korean credit card company, reported on July 15 that online luxury goods transactions in the first quarter of 2024 decreased by 32% compared to the first quarter of 2022. The number of transactions fell by 38%, while the number of customers making such purchases declined by 41%.
The data revealed a more pronounced decrease in luxury spending among male consumers, with a 45% drop in transactions, compared to a 33% decrease for women.
Age demographics showed significant shifts as well. Consumers in their 20s and 30s reduced their luxury purchases dramatically, with customer numbers falling by 63% and 38% respectively. In contrast, customers in their 60s slightly increased their luxury spending, showing a 3% rise in the number of purchasers.
The composition of the luxury goods customer base has also changed markedly. In the first quarter of 2022, customers aged 29 and under accounted for 42% of luxury goods purchasers. This proportion has now shrunk to 26%. Meanwhile, the share of customers aged 40 and above grew from 33% to 47% over the same period.
The study found that 87% of online luxury purchases were made through official brand websites of companies like Chanel, Hermès, and Gucci. The remaining 13% of transactions occurred on multi-brand platforms such as Balaan, Must’it, and Feelway.
A representative from NH Nonghyup Card explained, “Our data confirms that online luxury goods consumption has decreased due to the impact of the endemic phase of COVID-19, high inflation, and the ongoing economic downturn.”
Ashley Song (ashley@koreabizwire.com)
