Amid mounting economic pressures such as the economic downturn and rising cost of living, Korean consumers are exhibiting a cautious spending pattern, prioritizing the intrinsic value and practical utility of products over brand loyalty, according to a recent survey.
On July 3, EY Korea, a global accounting and consulting firm, released the 'EY Future Consumer Index' report based on a survey of 20,000 consumers across 26 countries worldwide.
According to the report, 99% of Korean consumers expressed concerns about the economic downturn, and 98% cited the burden of rising living costs. Both figures are higher than the global averages of 92% and 94%, respectively. Amid such economic anxiety, consumer sentiment has also weakened. Only 8% of respondents said consumer sentiment had improved over the past three to four months, while 30% said it had worsened. However, rather than simply reducing expenditures, there is a growing tendency to make more deliberate consumption decisions. Seventy-nine percent of respondents said they reconsider the necessity of a product before making a purchase.
Korean consumers showed a clear tendency to focus on the 'value' of products, such as quality and functionality, rather than brand loyalty. The proportion of Korean consumers who cited 'quality' as the most important criterion when purchasing consumer goods was 41%, higher than the global average of 35%. Forty percent of Korean consumers were proactive in switching brands, and 31% were indifferent to brands, both significantly higher than the global average of 18%. In contrast, only 29% of Korean consumers were brand-loyal. This is attributed to the domestic consumer goods market, where there is an abundance of high-quality alternatives and fierce competition, leading to a clear distinction between value-for-money and emotional-value consumption.
Globally, the proportion of consumers who prioritize 'quality' surged from 18% in 2021 to 35% in 2025, indicating a worldwide trend toward valuing quality. Rather than simple price competition, value consumption based on functionality is emerging as a major factor in consumer choice. Notably, more consumers are refusing to accept changes in the composition or renewal of branded products as 'genuine innovation' for brand improvement. Forty-two percent of global respondents regarded such changes as cost-cutting strategies by brands.
Worldwide, consumer perception of private brand (PB) products has improved, and their market share is rising. Sixty-three percent of global consumers evaluated that the quality of PB products is continuously improving, and the proportion of PB products in the total consumer goods market increased from 21% in 2023 to 25% in 2024.
In Korea, consumers were found to apply distinctly different purchasing criteria depending on the distribution channel. For online shopping, 67% of respondents said they choose platforms offering the lowest prices, while only 21% selected their preferred online platforms. Conversely, in offline shopping, 67% said they visit specific stores they prefer, indicating that Korean consumers place greater emphasis on retail experience and store trust in offline channels.
The survey also identified a gap between consumer expectations and actual behavior regarding AI-based online shopping experiences. Fifty-five percent of Korean consumers said they had experienced AI technology during online shopping, lower than the global average of 64%, but their expectations for AI technology were higher. Seventy-six percent of Korean respondents found AI-based product recommendation features useful, exceeding the global average of 68%, and 71% expected AI to enhance their overall shopping experience. However, only 21% of Korean respondents said they would actually purchase products recommended by AI.
Jung Ilkwon, Consumer Products Industry Leader at EY Consulting, said, "As consumers increasingly value the intrinsic worth of products, consumer goods and retail companies need to fundamentally overhaul their existing product and sales strategies." He added, "To respond to structural changes, innovation across the entire value chain is necessary, from product planning to distribution partnerships and pricing policies." He further emphasized, "In particular, companies must develop differentiated strategies that consider the characteristics of online and offline channels, as well as practical applications of AI technology, such as AI-based marketing and product information management optimized for AI, in order to secure both competitiveness and market share."
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