South Korea: Consumer Profile

May 2023

South Korea has witnessed population decline over the recent years, as number of childless households continue to increase. Generation X, aged 60-75 in 2040, will continue to hold its position as the most influential consumer segment. Older cohorts are anticipated to gain prominence within the affluent segment, thanks to delayed retirement and greater wealth accumulation. Widespread adoption of digital devices will continue to further entrench technology into the fabric of Korean everyday life.

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Key findings

Population is shrinking

For the past few years, South Korea’s population has been experiencing a steady decline year after year. By 2040, the consumer landscape in South Korea will reflect a significant shift towards households without children, influenced by declining fertility rates and an ageing society. By 2040, the consumer will have a median age of 54.6 and live in a 2-person household, with life expectancy increasing by more than two years for both males and females.

Generation X to hold significant influence over the consumer market

By 2040, Generation X is set to be aged 60-75, and is poised to maintain its status as the most influential consumer segment in South Korea, standing out for its sizable population and rising disposable incomes. Moreover, the older cohorts are expected to gain prominence within the affluent consumer segment due to a delayed retirement age and greater wealth accumulation.

High technology penetration

Being the global leader in terms of ICT adoption among individuals, businesses and government, South Korea boasts remarkable household technology penetration rates, with wide adoption of digital devices and advanced technologies. From smartphones and smart TVs to home appliances and high-speed internet, South Korean households exhibit extensive integration of technology into their daily lives.

Individualised approach highly valued among consumers

South Koreans exhibit a high level of prudence when it comes to making purchasing decisions due to cultural inclination to save more. However, cultural focus on outward appearances and the desire to maintain a specific social status add to a higher willingness to pay a premium for reputable and well-known brands, as well as personalised and tailored products.

Scope
Key drivers affecting consumers in South Korea in 2022
How developments today shape the consumer of tomorrow
Key findings
Today 2022: The growth of the South Korean population remains stagnant
As birth rates plummet, immigrant influx remains crucial for population growth
South Korean consumers exhibit less enthusiasm to engage through online platforms
Tomorrow 2040: Longer life expectancy and low birth rates boost older cohort
Generation X and millennials will remain the most crucial consumer groups
South Korea’s cities no longer grow due to population decline
Areas of opportunity
One Day Chocolate tablet offers snack alternative for health-conscious South Koreans
Today 2022: Higher prevalence of renting due to over one third of households being single
Average dwelling size to increase despite fewer people per household
Benefiting from free subway tickets, baby boomers strive to live near public transport
Tomorrow 2040: Declining families with children, rising older single South Koreans
Over half of households to have aged 60+ decision-makers by 2040
South Korea's ICT leadership fuels instant adoption of smart devices
Areas of opportunity
Yuhan -Kimberly empowering women leaders in South Korea
Today 2022: Growing income and stronger spending in higher income bands
Energy support and vouchers mitigate inflationary impact on households
Expenditure on health and wellness expected to increase among all cohorts
Tomorrow 2040: Significantly higher share of middle-class individuals compared to global
Senior population will continue to dominate the top-income band by 2040
Seoul to remain South Korea’s largest consumer market
Areas of opportunity
Traditionally considered a budget-friendly option, Soju emerges as a premium alternative
Key findings from consumer survey
Younger generations have a more positive outlook on their future
Despite higher savings and less debt, South Koreans remain worried about finances
Generation Z and millennials to stand up against South Korea’s rigid work culture
South Koreans seek bargains but also demand strong brands that emphasise high social status
Worried about climate change, South Koreans continue to lead in terms of waste recycling
PURITO: Korean beauty brand with sustainability at its core
Areas of opportunity
Key takeaways
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