More optimism on the South Korean consumer market today, and also for the luxury goods market in East Asian as a whole.

Luxury goods took a double hit in Asia during the past few years following the Asian crisis which hit South Korea particularly, and the global recession following it, reducing export income and hence salary levels. Despite South Korean's well documented suspicion of foreign culture, consumer's affection for imported luxury goods remains firm. With a South Korean economy on the upside for quite a few months now, Gucci may well be right...

According to Reuters, Guccichief executive, Domenico De Sole told a news conference yesterday that Gucci's sales in South Korea jumped 44 percent in the first nine months of last year, but declined to give exact sales figures.

In the case of the Hyundai Department Store, a leading up-market retailer which sells Gucci products, luxury goods sales in its main store jumped more than 10 percent to 102.7 billion won last year.

"We expect a 20 percent sales increase this year, as more young customers are buying high-end foreign products," department store spokesman Kim Jung-sun told Reuters.

He said purchases by consumers in their 20s or 30s accounted for 20 percent of the store's total luxury goods sales in 2001.

"Consumption of luxury goods are spreading to the middle class, as their disposable income increases," said Chung Yeon-woo, researcher at Daishin Economic Research Institute.

"Luxury goods sales are likely to show a steady increase this year, boosted by a cut in special excise tax and the World Cup finals," he said by telephone.

South Korea reduced special excise taxes on luxury goods in late November to spur growth by encouraging consumer spending. South Korea co-hosts the soccer World Cup with Japan this year.
The government expects private consumption, which makes up half of the country's gross domestic product.