The Reason Why Korean Spend So Much On Buying Smartphones

Korea has a fastest smartphones replacement rate.
According to the "2016 Internet Usage Survey," Korean consumers change their smartphones every two years and seven months.
The proportion of premium products in the market is certainly high as well.
In the first half of the year, 60% of the domestic sale accounted for high-end phones priced higher than 600,000 won($550).
So Korea got a bad reputation as a 'smartphone overspending' nation.

On august 9, one of the domestic mobile industry experts said , "There might be some socio-cultural characteristics of Korean reflected in the preference and replacement of premium smartphones in Korea," but "the most fundamental reason for overspending on smartphones is the current distribution structure of smartphones in Korea."

Most smartphones sold in Korea are bundled with the mobile network service from the major providers with monthly smartphone installment payments of 24 months, 30 months, and 36 months.

An industry source said, "The mobile communication store sells the high-end smartphones with card discounts regardless of the credit stability of the consumers anywhere in the country."

"When you buy a TV, the price is either 3 million won, 150,000 won or 500,000 won. You set your budget and make a reasonable shopping according to your cash and card limit, however,  when you buy smartphones, mobile service provider attach installment payments of smartphones to the monthly service bill and only provides the greatest discount when buying a high-priced premium phones with most expensive service plan, thus this sales method usually causes an illusion to the consumer and encourage over-spending," he pointed out.

Another official said, "Mobile operators are paying a lot of subsidies to high-end smartphones and combine them with high-priced plans, while paying low subsidies to cheaper smartphones so it leads to customers to buy more expensive phones than they need."

"In order to reduce the phenomenon of over-consumption on premium smartphones, it is necessary to separates smartphone sales and mobile network services." he added.