Overall consumption down, sales of high-end imports up

While overall consumption has been decreasing, the consumption of high-end goods such as imported golf accessories, electronic goods and automobiles has been on the rise.

The trend points to a widening gap between the middle to lower classes, which have been directly affected by the economic slowdown, while the well off have remained largely unscathed.

According to the Bank of Korea, the total dollar value of imported goods from January to September was US$11.8 billion, an increase of 12.4% from the US$10.5 billion registered for the same period last year. Meanwhile, the consumption of high priced goods such as electronic goods, automobiles and fur coats increased 2-3 fold in comparison to the same period last year.

A breakdown of the trend in consumption of high-priced goods and imports revealed an increase of 125% in imported cars, from US$45.1 million to US$117 million. The consumption of imported TVs increased 234%, recording US$52.2 million, while the consumption of imported audio products increased 74%, reaching US$381 million. For furs and golf equipment, increases of 94% at US$10.9 million and 40% at US$81.5 million were recorded, respectively.

In the case of imported automobiles, furs and VCRs, a steady increase has been recorded in each of the first three quarters of the year, indicating that the rate of increase is accelerating.

On the other hand, the overall increase in spending per family has decreased from 11.4% to 9.1% in the first two quarters, revealing a conspicuous downturn in the consumption increase rate.

A source in the BOK explained that the economy has been slowing, but even so, the upper segments of Korean society have been on a spending spree.

Lee Na-Yeon larosa@donga.com