When Sarah Jessica Parker, star of the popular comedy "Sex and The City", announced she was launching a clothing line, people naturally assumed it would be a luxury brand. But contrary to expectations, she launched Bitten, a line of super-cheap apparel. About 200 Bitten shops opened up across the U.S. on June 18, and most are running out of stock almost every day.
Super-cheap goods are gaining momentum around the world, including W200,000 laptops, W3 million cars, and W27,000 mobile phones. (US$1=W938) As the income gap widens, the propensity to consume is also becoming bipolar. On the one side, premium brands are extremely popular, and on the other, super-cheap goods are selling like hot cakes. The phenomenon is attributed to thriving demand for discount products in newly emerging economies like China and India.
Asustek Computer, a leading Taiwanese computer maker, announced recently that it would release the Eee PC, a $199 laptop in Europe and China this month. Hyundai Motor meanwhile is developing a W3 million car for the Chinese market.
It's happening in the domestic market, too. Some barbecue restaurants are drawing diners with three-layer beef for around W3,000 (equivalent to the price of a hamburger), which until recently was considered a premium menu item.
Matchmaking services, normally considered so expensive that many could not even conceive of using them, are now available for just W30,000. Matchmaker Sunoo is offering one marriage meeting opportunity for that price, although it's self-service. The user has to search for other members online and send messages to candidates. If a candidate says yes, they can meet.
Cosmetics brand TheFaceShop is leading a revolution in its industry by lowering the price of its products to less than W10,000. "Nowadays consumers tend to put their money into just one or two categories that they consider very important," said an official from TheFaceShop. "These people, even including buyers of luxury goods, choose cheap products in other categories. They're becoming more shrewd."
Bae Young-il, a research fellow at the Samsung Economic Research Institute said, "In the past it was usually latecomers to an industry that chose the low price strategy, but currently leading players are adopting the strategy. Global markets will be reorganized and led by emerging markets with more than one billion consumers. Thus companies should prepare for the future with effective low price policies."