A 23-year old university student surnamed Kim spent only 700 won ($0.6) to buy ham and tuna mayonnaise onigiri, a popular but cheap meal option available at all convenience stores, for his lunch. This has been his usual lunch, he said.

With every penny saved from such frugal spending on food and daily necessities, Kim marched into a department store and bought Off-White sneakers that cost more than 1 million won a pair without hesitation.

But Kim is just one of many millennials in South Korea with such an extreme spending pattern these days, and these young Korean consumers who shuttle between convenience stores and department stores to spend lavishly on luxury goods have emerged as big customers to local retailers amid the protracted economic slump that has dragged down spending overall in the country.

According to data released by Shinsegae Department Store on Friday, sales of luxury items jumped 31.6 percent in the January-October period from the same period last year. Sales of luxury items purchased by consumers in their 20s, in particular, surged a whopping 84.4 percent during the same period.

A surge in luxury item sales at department stores was led mainly by young luxury brands such as Balenciaga, Gucci, and Off-White.

An unnamed official from Shinsegae Department Store said that 30 percent of its sales are taken up by red-level VIP consumers that target luxury item spenders in their 20s and 30s.

To attract these young luxury brand fans, Korean department stores have aggressively expanded luxury brand lineups and lowered purchasing requirements to make it easier to become VIP members.

An unnamed official from Hyundai Department Store said that shoes and apparels of young luxury brands cost more than 1 million won each, and that more consumers prefer buying items offline than online.

Industry sources noted that many young consumers in their 20s and 30s today buy basic items such as jeans from fast fashion brands that cost 50,000 won a pair and spice up the outfit with one or two luxury items. They said that the trend reflects consumers’ desire to wear at least one luxury while dressing down in jeans and jackets as “they bring small but certain satisfaction.”

Convenience stores and discount stores on their end are also strengthening marketing to offer more cost-effective items through deals.

By Kim Gi-jung, Lee Yoon-jae and Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]