One in Four Seoul Citizens Reports Experiencing COVID-19 Revenge Spending

Food, Electronics, Luxury Goods, and Fashion Accessories Mainly Consumed
Seoul Institute Releases Q1 Seoul Consumer Sentiment and Revenge Spending Policy Report
Consumer Attitude Index 89.0, Slight Decline After Three Consecutive Quarters of Increase
Durable Goods Purchase Attitude Index Down 3.6p, Housing Purchase Attitude Index Down 2.0p

[Asia Economy Reporter Lim Cheol-young] It has been revealed that one in four Seoul citizens experienced revenge consumption due to COVID-19.

According to the Seoul Institute on the 7th, the survey results on consumer sentiment and revenge consumption in Seoul for the first quarter of this year showed that 24.3% of Seoul citizens (1,200 respondents) reported having experienced revenge consumption. The highest proportion responded that the initial period of revenge consumption was the "4th quarter of 2020," and the top fields of revenge consumption (based on first priority) were "Food (health foods, food and beverages)" (44.0%), "Electronic devices" (20.3%), and "Luxury fashion and accessories" (13.1%).

Among those who have not experienced revenge consumption, 10.1% responded that they intend to engage in revenge consumption in the future. The top planned fields for revenge consumption (based on first priority) were "Domestic and international travel" at 28.3%, followed by "Electronic devices" (17.4%) and "Food" (16.3%).

Regarding the main reason for revenge consumption, 36.4% of those with experience answered "compensatory psychology for feeling depressed," which accounted for the highest proportion. This was followed by "shopping demand postponed due to refraining from going out" (18.6%) and "substitute consumption such as spending on domestic and international travel" (18.2%).

In addition, regarding the impact of revenge consumption, 41.6% of those with experience responded that it was "positive" for personal happiness enhancement, which was higher than the "negative" response (25.4%). However, regarding the impact on household economy, 50.9% of those with experience responded "negative," which was higher than the "positive" response (17.5%).

Meanwhile, the consumer attitude index for the first quarter was 89.0, down 0.4 points from the previous quarter. The consumer attitude index recorded its lowest point (82.8) in the first quarter of 2020, then rose for three consecutive quarters until the fourth quarter of last year, but slightly declined in the first quarter of this year.

Among the components of the consumer attitude index, the current living condition index recorded 72.9, down 2.9 points from the previous quarter, while the future living condition index rose 2.1 points to 96.0. This is interpreted as an increase in households expecting improved living conditions one year later due to reasons such as increased household income, rising asset values, and expectations for economic activity resumption following the expansion of domestic COVID-19 vaccinations.

The durable goods purchase attitude index and housing purchase attitude index were surveyed at 77.6 and 53.8, down 3.6 points and 2.0 points respectively from the previous quarter. The housing purchase attitude index has continued to decline for three consecutive quarters after rising in the second quarter of last year. The net asset index rose 4.0 points from the previous quarter to 95.6%, with the most common reason for increased household net assets being "an increase in financial assets" at 28.6%. The employment outlook index rose 4.9 points from the previous quarter to 74.5.

The Seoul Institute stated, "Since the start of domestic COVID-19 vaccinations in February, social distancing and business restrictions have been eased, and the base effect is also at work, so it is expected that the consumer attitude index can recover to the 90s, the level before the COVID-19 outbreak," but also noted, "The resurgence of COVID-19 and inflation concerns could act as variables affecting economic recovery."

This content was produced with the assistance of AI translation services.