Published : Feb. 26, 2016 - 19:33
For a long time, the needs of consumers have been overshadowed by technological improvements, conspicuous marketing strategies and other factors. Finally, they have returned to the center of business activities.
But they are a rather new breed.
Amid the global economic slowdown, consumers now opt for pragmatism.
They do not opt to be stingy in their spending, but they are ditching spending on impractical things. When they shop, they calculate the cost efficiency of products. They swap “prettiness” or “luxuriousness” with “affordable” and “practical.” What makes them open their wallets is not the brand image but good practicality and functions coupled with a reasonable price tag.
They hunt for cheaper but equally fashionable attires. Instead of buying expensive clothes that could be inherited by their grandchildren, they turn to specialty retailers of private label apparels that roll out new garments every week and usually get forgotten the next season.
According to Samsung Fashion Institute, Korea’s SPA fashion market was worth 3.4 trillion won ($2.6 billion) as of 2014 and is expected to have grown since.
Uniqlo, a Japan-based fast fashion outlet, has seen its revenue exceed 1 trillion won in 2015, 11 years after entering Korea, followed by Spanish brand Zara’s 237 billion won. Domestic brands such as Samsung’s Eight Seconds and E-Land’s Mixxo and Spao are also catching the attention of these pragmatic shoppers who say such SPA clothes are fashionable, fun to wear and also easy on their budgets.
The SPA syndrome has moved to other industries. There is Ikea, Butter and Jaju for home and living goods, Shupen for shoes and Latem for accessories.
“You dress from the top to the bottom with Latem and it will still cost you less than 100,000 won. We are targeting pragmatic consumers who mix and match different items,” an E-Land spokesman said.
Consumers are choosing to go practical on cars, which has long been regarded as a show-off item.
“Koreans are famous for buying cars that are a bit over their means. This explains the thriving sales of premium cars such as Mercedes-Benz, BMW, Audi and more,” a car marketer said.
While the luxury car craze is pretty much intact, there is another type of consumers who go for compact cars. From Ssangyong’s Tivoli SUV to GM Korea’s Spark and Trax, Hyundai Motor’s Avante and Kia’s Morning, the compact car segment has been booming here over the past few years.
“The reason a car has been a showoff item in Korea is because people identified you with the car you drive. But now, people are paying less attention to what people think. From tax to maintenance, the cost is also affecting consumers to go pragmatic,” the marketer said.
But if you still can’t find a reasonably priced, full-functioning product, then make one.
The rise of prosumers, where customers become the producers, have induced many companies to invite customers to the incubation or development stage, to reflect their ideas in products.
Some even chip in to adventurous, yet-unhatched projects so that they can be realized. Crowdfunding is said to have opened a new era for prosumers.
“These people enjoy watching a concept realized with their money,” Hwang In-bum, a spokesman at Wadiz, a crowdfunding website, said.
And as the wise man Alvin Toffler predicted, these new breed of consumers are likely to replace much of the current passive consumers who pick and pay for ready-made items. Then, we will be able to talk about a new chapter in consumerism.
By Bae Ji-sook (baejisook@heraldcorp.com)