Spotlight on South Korea: Understanding the South Korean Consumer


In the 1950s, South Korea was as poor as India. But from the early 1960s to the late 1990s, it was one of the world’s fastest-growing economies. Today, South Korea ranks as Asia’s fourth-largest economy, and it boasts GDP per capita of about $32,000. The country’s wealthy, urbanized population has made it a highly attractive market for domestic and international retailers alike. Lately, however, this Asian Tiger has seemed sluggish and short of breath. In the second quarter of 2013, GDP rose a modest 2.3% year-on-year. Consumer spending has also been lackluster, due to a combination of economic uncertainty and what the Bank of Korea has described as “a pileup in household debt.” In 2012, the country’s ratio of household debt to disposable income hit a record 136%, up from 103% in 2004. Kim Choong-soo, governor of the central bank, recently warned that the nation’s household debt had “reached a limit”

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