South Korea ranks fourth globally in splurge purchases: report - South China Morning Post

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

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

The report indicated that about 31 per cent of Koreans’ monthly splurging is on food and beverages, including premium alcoholic beverages, while another 29 per cent is spent on clothing and accessories and another 10 per cent 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.

Office workers pick up lunch boxes at a convenience store in Seoul. Photo: Reuters

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

The report analysed the factors influencing consumer purchasing priorities and behaviours 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 US, Canada, Britain, France, Japan and China.

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

Soju poured into a glass at a Korean restaurant. About 31 per cent of Koreans’ monthly splurging is on food and beverages, including premium alcoholic beverages. Photo: Shutterstock

This figure shows that Koreans’ general economic outlook on their personal finances turned negative, compared to the global average and the US, 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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