The Korean Consumption Behavior

Introduction
The rapid economic development and the opening of the international market, Korean’s consumption behavior is increasingly developing along developed countries’ (Taiwan, Hong Kong, Singapore and Japan) consumption patterns. The opening up of the Korean economy led to the increased purchasing power of banks and this allowed them to recover from the 1997 financial crisis faster than other countries that were affected. When the country recovered, the demand for foreign products increased, especially for luxury goods. The Korean central bank claimed that nearly 20% of household spending on goods was made up of imported products. This was only for January, the first month of the year in 2002 (Don, 2002). In particular, Koreans of younger and younger generations are starting to become their luxury markets’ main consumers. Once a traditional country that viewed luxury items as impractical and wasteful, Korean consumers are now more in tuned with the trends in the luxury industry and are more willing to engage in status symbols competition with each other. Koreans could be said to have faced many changes over the last decades, which primed the economy and citizens for a surge in individualism now, and enhanced their pride in the ability to afford and buy luxury items.

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According to Nueno and Quelch (1998), the rising demand for luxury brands in Korea can be explained by the rising wealth in the whole of Asia and its emerging markets. The luxury goods industries, facing decreased demands from the traditional markets they serve, such as Europe, which at that time, was dealing with recession and minimal population growth, started to shift their focus on affluent Asian consumers who perceived Western luxury brands as signs or symbols of good taste (Nueno & Quelch, 1998). Among the Asian markets, Korea was one of the markets largely focused on by the globaal luxury brands (No, 2003). As younger and younger citizens of Korean gain more spending power, they increasingly became consumer trendsetters. Specifically, the trends and styles they follow are the ones from the Western countries (Louis, 2002). Individuals in their 20s are becoming the dominant consumers of the global luxury brands available in Korea, outpacing the middle-aged consumers (Park, 2000). Global luxury marketers became aware of this and they started to form strategies that would specifically attract this demographic of consumers. This is a far cry from their traditional target market, especially since they also started to cater to the young Korean consumers who certainly have money, but can be considered to be only belonging to the moderate-income bracket.
There are specific factors shaping Korean’s consumption patterns when it comes to the luxury market. Specifically, the factors are personal values; social recognition and demographics of young Korean consumers shape their purchasing decisions in the luxury market.
Personal Values
The variable of personal values has been widely used to illustrate the underlying dimensions characterizing consumer behavior and received significant amount of attention of researchers. According to Vinson et al (1977), who empirically measured the effects stemming from personal values on consumer behavior, personal values play an important role in shaping consumer behavior towards specific goods. Sukhdial et al (1995) particularly looked at the effects of personal values on consumer behaviors toward the luxury brand market. The authors found that personal values are critical in determining whether a consumer will buy or not buy luxury cars. Individual values and social-related values make up the personal value variable. Individual values are consumer ethnocentrism and materiality (Ha, 1998; Park, 1999; Sharma et al., 1995). Social-related values are conformity, vanity and the need for uniqueness. All these variables are discussed below.
Consumer Ethnocentrism
The variable of ethnocentrism determined the consumer behavior of Koreans with regard to luxury goods. Previous research illustrated that individuals who are highly ethnocentric are those with greater affinity with overseas products, which are produced and manufactured within culturally similar countries. As such, a high level of ethnocentrism discourages Koreans from purchasing global luxury brands. According to Shimp and Sharma (1987), consumer ethnocentrism can be defined as “the beliefs held by American consumers about the appropriateness, indeed morality, of purchasing foreign-made products” (p. 280). Various literature have expounded on the role of consumer ethnocentrism with regard to the behavior and attitudes of consumers when it comes to goods imported abroad (Shimp and Sharma, 1987; Durvsula et al., 1997; Brodowsky, 1998). Studies are also aware of the significant role that consumer ethnocentrism plays on consumer behavior when dealing with products made abroad; as such, they focus on the possible impacts with regard to the evaluation of the products manufactured in countries of cultural similarity on consumer behavior (Watson and Wright, 2000). There are also studies that determined the product-specific impacts of foreign-made products (Kim and Pysarchik, 2000), and impact on foreign brand personality (Supphellen and Grønhaug, 2003).
Some studies specifically looked at Korean consumers’ behavior as affected by their level of ethnocentrism. Some studies (Ha, 1998; Park, 1999; Sharma et al., 1995) illustrated negative influence effects of consumer ethnocentrism on purchasing imports. Those with high level of consumer ethnocentrism are more likely to shun foreign-made goods. In addition, Park (1999) determined the critical influence of consumer ethnocentrism on attitudes toward imported clothing in the Korean market. The study found that there is a negative relationship between consumer ethnocentrism and attitudes toward when it comes to buying global luxury brands.
Materialism
Materialism refers to a person’s penchant for accumulating goods and money. Some cultures view this trait as positive and desirable (Diener & Biswas-Diener, 2002). According to Belk (1984, 1985), materialism is a personality-like trait that differentiates a person when it comes to his or her possessions. A materialistic person will view possessions as essential to their identities and survival, while a non-materialistic person will view these possessions as secondary or even worthless. Richins and Dowson (1992) claimed that materialism refers to a group of centrally-held notions about the significance of possessions and their roles in one’s life. As such, being materialistic propels an individual to acquire more and more material objects. Under this definition, Richins and Dowson (1992) stated that materialism is a key factor that shapes an individual’s consumption behavior and patterns, especially the type and quantity of goods they would buy.
As consumption patterns also became globalized, consumption behavior became largely shaped by transitional and multinational firms’ marketing efforts. Consumers worldwide are becoming more material as they start having difficulties discerning which is a need and which is a want. Global marketing efforts make it hard for consumers to believe that they can forego something they want. One pattern that emerged is that people start to value material lifestyles and value well-known/popular brands that showcase their prosperity (Solonom, 2004). With their market doors expanding to global trade, and with their disposable income increasing, Korean consumers are one of the prime examples of such consumers.
Koreans are now in the brink of materialism. They want the lifestyle that is being portrayed by the media that are highly fictional, romanticized and dramatized. According to Yoon (2003), spreading of materialism among the Koreans, particularly the younger generations, has been conspicuous starting from 1995. Nearly two decades later, it can be observed that Koreans are increasingly viewing money as the representation and sign of success, and as a result, are increasingly attracted to global luxury brands, which are the epitome of wealth and achievement in life. They buy these goods merely to show off to others.
Specific studies such as the ones by Fournier and Richins (1991), Richins (1994) and Wong (1997), have illustrated the significant and positive relationship between that of materialism and conspicuous consumption. According to these studies, materialism encourages success-orientated consumption and purchase of goods. Fournier and Richins claimed that two causes for increased level of materialism is the idea that one can display his or her status through his or her possessions and the idea that they can affirm themselves through these possessions. According to Richins (1994), individuals who are highly materialistic have higher tendencies to put more importance of expensive goods and would be the ones most likely to publicly display these items to show their success and social status.
Bearden and Etzel (1992) categorized goods into publicly-consumed and privately-consumed. Wong (1997) took these categories and performed a study to determine which category will be prone to conspicuous consumption. Wong found that individuals are more materialistic towards publicly consumed goods and therefore, these goods are more likely to be consumed conspicuously. Public goods are the goods that can be used or consumed in public view and not commonly owned or used, such as household items. Global luxury fashion brands are one of the top goods in the public goods category, which is why materialistic individuals will put prime importance into the acquisition of these brands or goods. Materialists would consume these goods primarily for displaying them publicly so as to announce their status and successes in life.
In this light, Ziccardi (2001) defined luxury brands as less about the item, and more about the brand and what it stands for. Koreans, especially the young ones can be considered the ones who are status-oriented, and would showcase this personality through their possessions. According to Wong (1997), comparing East Asian consumers with American consumers, it can be said that East Asian consumers are the ones more materialistic. American subjects buy these expensive goods not because they are putting prime emphasis on the public meaning of luxury consumption, unlike their East Asian counterparts (Wong & Ahuvia, 1998). Most studies used the concept of materialism to pinpoint that Asian consumers, who are shaped by the value of collectivism will more sensitive to the public meaning of luxury consumption than did Western consumers, and this will influence their buying patterns. As such, materialism promotes Korean’s purchasing intentions toward global luxury brands.
Conformity
Literature claimed that conformity is one of the most significant factors shaping purchasing patterns when it comes to publicly consumed products. As such, Wong and Ahuvia (1998) put forward that consumers in Confucian culture are more likely to purchase luxury good based public reputation of the members of the group they belong to in comparison to their Western counterparts. Therefore, conformity promotes purchasing intentions of Koreans toward global luxury brands.
According to Bearden and Etzel (1982),, reference group influences are different between publicly and privately consumed goods as well as between luxuries and basic necessities. Conformity is described as one of the most significant factors shaping publicly consumed goods. Taking this into consideration, Wong and Ahuvia (1998) claimed that those who abide by the Confucian culture will be those who are likely to put a great deal on the effects of their consumption of luxuries. When it comes to fashion, an earlier study by Rose et al (1994), claimed that individuals who have higher level of conformity will be those who are likely to consume clothing and display the brand out to the public. It is easy to assume that conformity is one of the most important predictors of buying luxury brands, particularly for fashion brands. Wong and Ahuvia (1998) differentiated luxury consumptions between Confucian and Western countries. They found that although both groups consume conspicuously luxury goods, Americans buy luxury products because of their personal preferences, while those in East Asia, buy these goods because they want to conform to specific social norms. They also found that Southeast Asian consumers put greater emphasis on publicly-visible items because of their attached symbolic meanings and values. This suggests that East Asian consumers, who experience higher pressure to conform are more likely to buy publicly-visible luxury items, because they perceive these goods as directly representing their wealth and success.
According to Lacsu and Zinhan (1999), East Asian consumers are more likely to buy luxury items, especially those that have social visibility. Because luxury goods shout success and wealth, and are especially different from mass market products, East Asians are more likely to conform to social pressure and experience higher drive to purchase these brands.
The need for Uniqueness
According to Workman and Kidd (2000), an individual’s need for uniqueness significantly affects his or her behavior toward luxury fashion brands. According to Tian et al. (2001, p. 52) uniqueness is an important factor in consumer behavior. Uniqueness is defined as “the trait of pursuing differentness relative to others through the acquisition, utilization, and disposition of consumer goods for the purpose of developing and enhancing one’s self-image and social image”. According to literature, consumers’ self and social image are largely derived from the symbolic meanings they attach to the products they purchase (Tian et al., 2001). Therefore, consumers wanted something not generic and very similar to others. Luxury products have the great power of inducing the feeling of uniqueness among consumers. Aside from being insanely expensive, and the fact that all of them reigns worldwide, they are reputed to be of incomparable quality, having legions of counterfeits under their names. After all, imitation is the best form of flattery. One word to describe these luxury brands is “iconic”. Take for example, Gucci and its red and green stripes, these may just be your ordinary logo, but no, everyone wants a piece of it. The brand offers high fashion yet very commercial items, which is why everyone loves it. Chanel on the other hand as the next brand favored by most luxury consumers, is observed to stay in this position and relevant to the industry because it has a host of classically stylish goods. Koreans’ need for uniqueness promotes purchasing intentions toward global luxury brands.
Those vying for uniqueness in their possessions are those more likely to be attracted to luxury goods, because uniqueness is precisely what luxury brands seem to offer to the consumers. There are many factors that verify this. First, luxury brands’ limited quality enables the buyers to feel unique and distinctive from others who use mass market products (Burns & Brandy, 2001). According to Tian and Mckenzie (2001), those who value uniqueness are attracted to luxury products because they are scarce and they would not find just anyone owning the same. In this regard, luxury brands endeavor to preserve their uniqueness by not producing too many of the same design so as to avoid over-diffusion. This makes them very different from the mass market products. According to Dubous and Paternault (1995), employing an empirical test showed that consumers are attracted to luxury products through awareness, and negatively attracted through diffusion, which is a paradox under luxury brand management. Consumers are aware that luxury brands strive to uphold their prestige by being endorsed expensively by popular people, but they are not made to be owned by many people. As such, consumers’ need for uniqueness find that luxury products satisfy this need. Korean consumers’ general perception of foreign luxury brands in general follows this line of thought. They perceive that owning luxury brands differentiate them from others and make them unique because not all will have the same kind or brand. Even with the influx of global luxury brands in the Korean market, Korean market still have this notion that luxury brands are hard to access, and having it will make them one of a kind, because luxury goods have scarcity value.
According to Gluck (2002), young Korean consumers purchase apparel and other fashion items in which they can use to express their individuality amidst a rather uniform society. Young consumers in Korea believe that they can express their uniqueness using foreign brands with scarcity value, which as a result, boosted demand for luxury brands in the Korean market. In addition, because luxury goods are globally characterized as having recognizable styles and designs, it is easy to showcase their uniqueness, social status and success even across the world. Young consumers are attracted to luxury goods to the promise of uniqueness as well as giving them a boost in their social images.
Vanity
According to Netemeyer et al. (1995, p. 612), vanity is the “excessive concern for, and/or a positive (and perhaps inflated) view of, one’s physical appearance” and achievement vanity as “an excessive concern for, and/or a positive (and perhaps inflated) view of, one’s personal achievements”. Vanity is the concern of an individual with his or her physical appearance because they use it to convey social status. As such, people who are vain will engage more in conspicuous consumption because this can show off their physical appearance and status (Netemeyer et al., 1995). As of now however, no study has yet determined the relationship between vanity and fashion luxury consumption. However, it is hypothesized that Korean consumers’ vanity promotes purchasing global luxury fashion brands.
According to Durvasula et al (2001), vanity is described as one’s strong emphasis toward one’s outward appearance such as being overly concerned and fretful over one’s clothing, from the style, to the quality and to the brand. According to Durvasula and his colleagues (2001), a person’s belief or perception that others are looking at how he or she dresses, or what kind of luxury brands he or she carries, this will shape his or her decision in purchasing luxury brands. Social recognition therefore plays the key in individual’s decision to purchase luxury brands.
Social recognition
Although personal values such as materialism and conformity can stimulate individuals to purchase luxury goods because of what they represent and symbolize, they might not be the only factors why luxury goods consumers are attracted to these products and brands. According to Nueno and Quelch (1998), consumers feel that owning luxury brands allow for information to spread with regard to the owners’ social status. These luxury products can help the consumers say what they cannot publicly announce, which I that they are wealthy and successful. The ownership of these goods allows them to claim their social status and prestige without saying it outright. Consumers believe that the nature of the global luxury brands allows others to recognize the brands and this will be a vehicle for the owner to communicate to others their success. This nature plays a crucial role in shaping one’s decision to purchase luxury brands. In particular, Koreans view global luxury brands as the embodiment of prosperity and social status, which is not really that different from the perception of the Westerners. Because others will recognize one brand, consumers will experience higher intention of buying this brand.
Demographics
Demographics play an important role in the purchasing decision of consumers when it comes luxury goods. Demographics include age, income and purchasing frequency. According to Louis (2002), younger people are more attracted to luxury goods and what they offer. In Korea, the younger generations are those who have higher purchasing intentions when it comes to global luxury goods. They are what most lable as consumer trendsetters and they try to uphold this image, by having the “IT” things
According to Dubous and Duquesne (1993), income is a very important factor when it comes to luxury goods purchases. As widely known, luxury goods are not cheap. Therefore, monthly income or at least monthly pocket money of the young people plays a significant determinant. By having the means, consumers will be more inclined to buy luxury goods. Once consumers become loyal to a brand, it is already easy for firms to market the goods to them. In fact, it has been said that attracting new consumers are more difficult than maintaining existing ones in the industry of luxury goods.
Veblen’s theory and East Asian consumption patterns (projections in South Korea)
Emergence of the mass production phenomenon in the modern era allowed for economic crises, the resolution of which should be through mass distribution and mass advertisement. A direct consequence is the transforming of the household from being a unit of production to that of a unit of consumption (Kearl & Gordon, 1992). This transformation also led to a new form of consumer ethic, which replaced Weber’s Protestant ethic of self-discipline. It also goes against the principles put forward by Weber, such as purposeful activity, delayed gratification and thrift. In this modern era, different patterns of over spending can be observed such as: orgy of spending (McKendrick et al., 1982), hedonism (Bell 1980; Campbell 1987); impulse spending (Kearl and Gordon 1992), and then the different marketing promos and strategies of firms to make people buy such as, “buy now, pay later and more others (Packard 1957). It can be said that majority of these characterizations can be explained by Veblen’s (1979) and Simmel’s (1904, 1950) seminal work on modern consumerism.
Veblen’s most well-known principle related to his term ‘conspicuous consumption’ which describes the unnecessary purchase of services and goods which are bought for the sole focus of displaying and advertising wealth. This is done in the endeavor to maintain or attain a certain level of social status. Such goods are now collectively known as ‘Veblen goods’, which is a group of commodities. The fact that these goods are placed at such high prices is the very thing that makes them attractive to conspicuous consumers.
Conspicuous consumption was certainly not limited to the western countries, in East Asia, for example, girls in affluent families would have their feet broken and tightly bound so that they grew to have tiny “lotus” feet.  These were thought to be very fashionable since the women who had them were unable to survive without the help of servants. This was a sign of wealth taken to the extreme.
Today, there are still many examples of ‘conspicuous consumption’ and the studies on general modern consumption are so intricate, that almost all walks of life are targeted with today’s mass media. Adverts and billboards are everywhere telling the public what’s ‘cool’ and what’s not. Brands like Louis Vuitton, Chanel and Moet & Chandon sell a lifestyle. Moet & Chandon advert states ‘Be Fabulous’ and shows two beautiful well-dressed women climbing out of an expensive car with a bottle of champagne in one woman’s hand. An advertisement like this is basically trying to show the public what status could be achieved by purchasing a bottle of Moet & Chandon. The term ‘Keeping up with the Joneses’ comes to mind, as studies show that many consumers purchase goods just to ‘show off’ and maintain a certain status amongst their friends.
Veblen goods aren’t just restricted to clothes as the purchase of certain magazines, purely for the status they offer. Being seen reading a magazine like Robb Report or Conde Nast’s traveller may give the impression that one can afford what is featured in the magazine. Veblen also spoke about the way dress can prove many things. The wearer can give an impression that they can spend without much thought on the price. Veblen goods are still very much around, such as designer handbags, expensive wines and thousand-dollar watches. The luxury watch is an ultimate example of a Veblen good as the consumer really buys into the allure of a higher status. Companies like Rolex, TAG Heur and Omega have all used celebrities such as Roger Federer, Leonardo DiCaprio and Daniel Craig in his bond suit. Even though its purpose is very practical and can help with everyday decision making. These watches are aimed a business men with a high salary who identify or would like to identify with the sports stars and actors wearing these watches at the back of TIME magazine and the like. A Louis Vuitton bag for example just wouldn’t be viewed the same without the high price tag.
Today’s fast fashion and mass production also encourages conspicuous consumption. However mass production has changed the outlook on man’s life and has created a singular type of existence which can be viewed as almost humiliating and that the products are what drives man. The trends we see from designers on catwalks are translated as quickly as possible into high street stores. It is not surprising that with the emphasis on keeping up with the latest trends, which ties into ‘fitting in with society’ consumption of clothes has reached an all-time high. The quality of clothes however, is less of a feature than the over-all look of the item. In the Victorian times, garments had to be made of the best lace, but with today’s technology, garments can be made to look more expensive than they really are. Keeping up-to trend with accessories such and bags and shoes is still very expensive to do. Designer’s put their signature touches on shoes and bags, which make them more lust after. Christian Louboutin’s shoes have the signature red sole, Louis Vuitton may feature an LV and a Mulberry bag could carry their characteristic tree on the logo. To be seen with any of these items offers a instantaneous status that comes with it.
Korea is now considered an epitome of such societies. When Korea was only beginning to industrialize, conspicuous consumption among most people can be said to be still tacit and defensive. An explicit display of conspicuous consumption was criticized for being impractical and imprudent, notwithstanding the person’s social status. This trend is now gone. Today, many Korean people compete based on social stature and symbols, and this encouraged new patterns of consumption. Even during religious rituals, Koreans cannot help but compete with each other by showing off how many their goods are or expensive as a sign that they have higher status.
Conspicuous consumption, behavior does not just exist within the leisure class, however throughout every class and individual in our society. The want to consume is nothing new, people work and live to consume, people are what they consume. As seen with celebrities today, they consume the best cars, the best clothes, the biggest houses. Veblen explains a man of wealth is the one who consumes without restrictions on anything. This type of consumption is what Veblen describes as “conspicuous waste”, the manner in which people dress is always seen and noticed, especially when celebrities are displaying them. With conspicuous consumption, the consumption and wealth must be displayed and noticed. Many celebrities, who are members of the leisure class, show off their homes, cars, clothes, and other items. Veblen argues this is harmful to our society, these luxuries and types of consumption are only for the leisure class, and one is expected to live this certain lifestyle in order to keep their standing in the leisure class. A man of the leisure class must consume certain goods and give away certain types of rewards or gifts to with hold his position within the leisure class. Koreans are very much in this phase right now, outpacing the Americans it seems.
Koreans are proving that the “emergence of the leisure class coincides with the beginning of ownership” (Veblen 22). Before the early 20th century, Korea was ruled by the Yi Dynasty and had clear distinction of the class system with the ideologies of Confucian Tradition: In this context, women were a form of ownership. Women were seen as a status symbol, a trophy wife, for which men of the leisure class could own and show off. When we own people, we own material or production, so by owning something one can exploit his earnings. Like ownership, most women of the leisure class are considered “vicarious leisure”. Veblen’s “vicarious leisure” is defined as people who live the life as though they are a member of the leisure class however don’t get all the material that comes with it because they are living through the wealthy. Throughout the barbarian stages, men were considered the breadwinner and worked while the women stayed at home while women were considered to live through their spouses. The women of the household were not suppose to work and were expected to be more “showy” about their leisure than men, they were expected to be beautiful and represent the household’s wealth.
Literature in the early 1980s showed that conspicuous consumption of products were positively linked to vulnerability to the influence of peers and the opinions of others. According to Bearden and Etzel (1982), conspicuous consumption is more likely when purchasing publicly consumed luxury products than privately consumed luxury products. Conspicuous consumption ate up a significant part of the income of the urban population compared to the rural population. Urban citizens are more concerned about their appearance and status, and are more susceptible to buying things that would serve the purpose, regardless of the cost.
Discussion
This study aims to understand the relation of conspicuous consumption and status competition in Korean women. This section explore the spending behavior of women in Korea, which are found as new phenomena under prosperity in South Korea after the 1997 financial crisis, hence post IMF period. Under current government forms and of Neo liberalism, we are able to recognize the irony that contest the very hegemonic idea of neo-liberalization, which is silent but hyper conscious in the minds of Korean women. This fact is elaborated in relation to the patriarchal ideology deeply rooted in the tradition (neo-Confucian) minds of Koreans and although times have moved on, the representation of body in Korean women in Korean society today remains valid. Here I am able to explore conspicuous consumption of the body as a whole, and how consumption on appearance is conceived in the minds of young women today.
Implementation of appearance of Women in the Post-IMF, Neo-liberal Korean Society
The transformations in post-IMF Korean society accorded with accelerated transition to a postmodern consumer society. An author proclaimed in 1999, “The present Korean society is a heaven for consumers” (Yoon 1999, 189), and the trend of consumption for self-distinction and expression of self-identities has been ever intensifying. Concerns over body in this “era of culture” became a widespread set of phenomena after the IMF crisis. Healthy lifestyles became a social trend in the 2000s when numerous self-help books were published to tell consumers how to pursue them. Women are increasingly drawn into consumption of not only of luxury consumption, but beauty products and care services as well. More women have been resorting to improve their appearances for which purpose smart or classy clothes and creative or original hair styles had been sufficient in earlier decades (Lee 2006, 73).
Especially for young women, their gender and class statuses are estimated no longer primarily by their individual characters and resources, but rather by their appearance. Increasingly, Koreans of all ages and genders view their appearance as something that can be improved through ever developing. Not being fashionable or know