“The Neighbor Effect” — Why Koreans Are “Obsessed” With Luxury Brands And Criticize Knockoffs

K-Pop idols and influencers wear luxury brands so often that breakdowns of their entire outfits and costs are quickly shared online, especially after major events.

IVE’s An Yujin wearing Gucci and Adidas to the Seoul pop-up store for their collaboration.

However, celebrities aren’t the only ones wearing items so expensive they could pay off a brand-new car.

“Tiffany & Co.” ambassador BTS’s Jimin wearing over $34,000 USD in jewelry. | Tiffany & Co.

Many Korean citizens also wear them, with two items recently taking over. Chanel‘s medium Classic Handbag is $10,200 USD and has earned the title of the “wedding guest bag” from its frequent appearances at weddings; Louis Vuitton‘s $1,550 USD Speedy 30 handbag is known as the “three-second bag” because it’s seen every few seconds in Korea.

Chanel’s $10,200 USD Classic Handbag. | Chanel

Whether celebrities or everyday people, Koreans’ love of luxury brands is so strong that it’s reached the point of “obsession,” which Koreans have acknowledged themselves. There are a few reasons why expensive goods have become so important to Koreans, which go much deeper than expected.

Louis Vuitton’s $1,550 USD Speedy 30 handbag. | Louis Vuitton

According to Kookmin University economics professor Seo Won Seok, it all began with the country’s globalization. Ever since Korea gained access to luxury foreign goods in the 1980s, they’ve become a hub for buying them. Seoul has even been crowned “a global luxury brand haven with 221 outlets, ranking second worldwide just behind Tokyo.”

Korea’s economic strength has considerably grown since the mid-1980s and overseas travel became allowed—enabling Koreans to explore the world of foreign luxury goods.

— Seo Won Seok

“Dior” ambassador BLACKPINK’s Jisoo. | @sooyaaa__/Instagram

Due to the significant increase in spending on luxury goods, branded items eventually became a symbol of social status and success. And major events like weddings are where Koreans show off their luxury items most, which is the origin behind Chanel’s classic handbag becoming the signature “wedding guest bag.” However, a Seoul housewife exposed the dark side of the obsession.

There is an obsession among Koreans, especially women, to own at least one luxury item if they are in their thirties. Having luxury goods reflects their economic status, and many would even consider using knock-offs as an alternative.

— Seoul housewife Kim Soo Jin

Aespa’s NingNing at a “Versace” pop-up store in Seoul.

So much importance is placed on owning luxury brands that some Koreans feel the need to buy knockoffs to appear wealthier than they are, which ultimately backfires. Single’s Inferno star Song Ji A and the stylist of WANNA ONE became targets for purchasing and making fake goods, painting a false narrative of wealth that angered netizens. There’s an even deeper reason for this desire to appear wealthy.

“Single’s Inferno” star Song Ji A wearing a fake bag on the left and a real one on the right. | @dear.zia/Instagram

Jeonbuk National University professor Kang Joon Man revealed that Koreans are victims of the “neighbor effect.” They’re constantly competing with their neighbors to show off their higher social status and wealth, gaining pleasure from their rise in the social hierarchy because of luxury brands. It’s a unique problem that’s taken over Korea because of their high luxury spending.

Korea’s high social and cultural homogeneity, along with its dense residential communities, has fostered a culture of comparing with neighbors in daily life. The ‘neighbor effect,’ which hinges on finding life satisfaction through comparing oneself to others, plays a significant role in driving the desire for owning luxury goods.

— Kang Joon Man

Jeonbuk National University | Jeonbuk National University

Unfortunately, there’s no end in sight for Korea’s obsession with luxury goods. Not only do the majority of Koreans see no problem in flexing luxury goods, but the country has managed to keep the luxury market afloat despite the pandemic. They’ve even doubled the sales of luxury brands like Moncler and remain “the world’s largest spender on luxury goods.”

“Versace” ambassador Stray Kids’ Hyunjin at the brand’s Seoul pop-up store. | Versace