[Youth Report] Even with Flaws, So What... Consumers Turning to 'Reaper' Products

Seeking Rational Consumption Amid High Inflation
8 out of 10 People "Have Experience Purchasing Refurbished Products"

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As consumers try to save every penny in an era of high inflation, the popularity of refurbished products is rising. Refurbished products refer to items returned due to simple buyer's remorse or those with minor defects from the manufacturing process that make normal sales difficult. In the past, many consumers hesitated to purchase refurbished products, thinking their value was low. However, with soaring prices, more consumers are turning to affordable refurbished products.

Consumers Seeking 'Rational Consumption' Amid High Inflation

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As high inflation continues, demand for refurbished products is increasing. According to a survey conducted in June by market research firm Embrain Trend Monitor targeting 1,000 adults aged 19 to 59 nationwide, 8 out of 10 consumers (77.6%) have purchased refurbished products. Additionally, 84.4% of respondents expressed hope for a greater variety of refurbished products. This means that most consumers do not hesitate to buy affordable refurbished items as long as minor defects do not significantly affect usability.

Kim Ah-young (28), a third-year office worker living in Yeongdeungpo-gu, Seoul, recently purchased a refurbished product. She said, "Last month, I started living alone near my office and needed an electric rice cooker, so I bought a refurbished one." She added, "I know the regular price of the rice cooker is in the high 200,000 KRW range, but I was lucky to buy it for about 150,000 KRW."

Kim said, "I don't cook rice very often, but I thought it would be inconvenient not to have one, so I bought it," adding, "There is no significant difference in performance, so I think I made a rational purchase."

The reason consumers are turning to refurbished products seems related to the recent sharp rise in prices. According to Statistics Korea's 'Consumer Price Trends,' the core inflation index excluding agricultural products and petroleum from January to July this year rose 4.5% compared to the same period last year.

This is the highest level in 25 years since the 6.8% increase from January to July 1998 during the International Monetary Fund (IMF) financial crisis. It is also higher than the 4.2% increase from January to July 2008 during the global financial crisis.

Core inflation is calculated based on goods less sensitive to environmental factors. It excludes agricultural products affected by seasonal factors and petroleum products whose prices fluctuate due to temporary external shocks, so its volatility is generally low. However, as consumer price inflation rose last year, core inflation also increased.

Even with Defects... Popular Among MZ Generation Who Value Cost-Effectiveness

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Among these, the generation showing the most interest in refurbished products is the MZ generation (Millennials + Generation Z). Unlike older generations who strongly value ownership, the MZ generation emphasizes sharing and experiences. They also prioritize cost-effectiveness, so they have no hesitation in purchasing refurbished or secondhand products.

As the popularity of refurbished products grows, their variety is also expanding. Recently, after refurbished home appliances and furniture, 'refurbished phones' have become popular. Refurbished phones refer to products that are returned normal items, initially defective products, or display models that have been reconditioned for sale. Refurbished phones have quality similar to brand-new products officially produced by manufacturers but are priced about 30-50% lower. The MZ generation sometimes chooses refurbished phones along with budget phone plans as a way to save on communication costs.

Supported by this trend, according to market research firm Allied Market Research, the global refurbished phone market size is expected to expand to $145.9 billion (193 trillion KRW) by 2031.

Meanwhile, the distribution industry is also actively selling refurbished products. There are specialty stores that gather refurbished home appliances and furniture in one place, and online shopping platforms operate separate sales pages for refurbished products. In particular, some online shopping platforms sell refurbished products alongside food items nearing their expiration dates and imperfect agricultural products at prices lower than normal.