Korea ranks fourth globally in splurge purchases: Deloitte report - 코리아타임스

A visitor selects wine for tasting at the Seoul International Wine & Spirits Expo 2024 at COEX in southern Seoul, Thursday. Yonhap

Koreans' extravagant purchases center on premium alcohol drinks, clothes

By Anna J. Park

Korea ranked fourth globally among 20 major countries in terms of monthly average amount of splurge purchases, and a significant portion of the consumption centers around premium alcoholic beverages, a latest Deloitte report said.

According to the Deloitte Consumer Signals Link Index released by Deloitte Korea, Thursday, Koreans spend a monthly average of $59 on splurge purchases, while the 20 countries' average falls at $41.

The report indicated that about 31 percent of Koreans' monthly splurging is on food and beverages, including premium alcoholic beverages, while another 29 percent is spent on clothing and accessories and another 10 percent on self-care.

It also showed that such conspicuous consumption in the food and beverage sector is about three to four times higher compared to spending on household items.

When asked for the reasons for such indulgent purchases, Korean respondents mostly cited emotional comfort (15 percent), practicality (15 percent) and hobbies (13 percent).

The report analyzed the factors influencing consumer purchasing priorities and behaviors through survey and interview results from about 1,000 adult consumers in 20 countries in North and South America, the Asia-Pacific and Europe, including the U.S., Canada, the U.K., France, Japan and China.

China ranked highest among the surveyed 20 countries with $143, followed by the United Arab Emirates at $127 and Saudi Arabia's $121 in average monthly splurging. Both Germany and France followed Korea at $53. The U.S. ranked 15th place, with a monthly average of $35.

The report also indicated that Korea experienced a drop in the Consumer Financial Well-Being Index, which measures consumers' self-assessment of financial soundness and future stability based on April 2020 as 100 points. The index for Korea fell to 90.6 in May this year.

This figure shows that Koreans' general economic outlook on their personal finances turned negative, compared to the global average and the U.S., which showed slight increases to 102.8 and 98.4, respectively.

Deloitte Korea explained that the report's comprehensive analysis shows Korean consumers have been experiencing significant economic stress this year, and have been splurging, particularly on food and beverages, in an attempt to relieve stress.

"Even in difficult financial situations, consumers continue to engage in splurging for emotional comfort and stress relief," said Kim Tae-hwan, partner at Deloitte Korea.

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