THIS CO MMENTARY IS P UBLISHED BY FITCH SO LUTIO NS MACRO RESEARCH and is NO T a co mme nt o n Fitch Rating s ' cre dit rating

s . Any
co mme nts o r data include d in the re po rt are s o le ly de rive d fro m Fitch So lutio ns Macro Re s e arch and inde pe nde nt s o urce s . Fitch Rating s '
analys ts do no t s hare data o r info rmatio n with Fitch So lutio ns Macro Re s e arch.

Industry Forecast - South Korea Household Characteristics Forecast

15 Mar 20 19 So uth Ko re a Co ns ume r & Re tail

Key View: High and rising disposable incomes continue to make South Korea an attractive market for consumer-facing companies. In particular, growth in the upper-
income segment (household disposable income of USD75,000+) will buoy luxury spending. However, slow growth in household numbers and the rise of more single or
dual-income households will weigh on the type of opportunities present for retailers.

Latest Updates

Net average income per household will rise rapidly from USD48,622 in 2019 to USD55,823 in 2023.
More than 99% of households will fall in the middle-income segment and above (with a disposable income of USD10,000 or more), with the
upper-income segment (with a disposable income of USD75,000 or more) increasing to account for 17% of total households in 2023, up from
11% in 2019.
Household number growth will slow, growing by an average 1.1% annually over the medium-term to 2023, down from 1.5% over 2014-2018. In
addition, the share of single or dual number households will also pick up by 2023.

Purchasing Power And Demographic Trends

Hous ehold Income Breakdown (2019-2023)

f = Fitch Solutions forecas t. Source: National s ources , Fitch Solutions

Clic k he re to e xplore da ta

Structural Trends

The number of hous eholds will increas e at a tepid pace over the next five years , amid an ag eing population and low fertility rates . We forecas t the number of
hous eholds to ris e from 21.0mn in 2019 to 21.9mn in 2023. The number of working adults per hous ehold will marg inally decline over the next five years ,
which reflects the ag eing population. Given the modes t population g rowth, g rowth in hous ehold income will be a boos t to purchas ing power. Between 2019
and 2023 we forecas t net income per hous ehold to ris e from USD48,622 to USD55,823 which bodes well for retailers acros s mos t categ ories .

More than 99% of Korean hous eholds have net incomes of more than USD10,000; therefore, virtually all hous eholds have acces s to modern forms of
cons umption, offering a s izeable cons umer bas e to retailers . The proportion of hous eholds with net incomes of more than USD75,000 will reach 17% of
total hous eholds in 2023, which will create s trong opportunities for retailers offering luxury products and operating in premium categ ories . This trans lates
to 3.8mn hous eholds in 2023, up from 2.3mn in 2019.

This re po rt fro m Fitch So lutio ns Macro Re s e arch is a pro duct o f Fitch So lutio ns Gro up Ltd, UK Co mpany re g is tratio n numbe r 0 8 78 9 9 39
( 'FSG') . FSG is an affiliate o f Fitch Rating s Inc. ( 'Fitch Rating s ') . FSG is s o le ly re s po ns ible fo r the co nte nt o f this re po rt, witho ut any input fro m
Fitch Rating s .
Co pyrig ht © 20 19 Fitch So lutio ns Gro up Limite d. All rig hts re s e rve d. 30 No rth Co lo nnade , Lo ndo n E14 5GN, UK.
THIS CO MMENTARY IS P UBLISHED BY FITCH SO LUTIO NS MACRO RESEARCH and is NO T a co mme nt o n Fitch Rating s ' cre dit rating s . Any
co mme nts o r data include d in the re po rt are s o le ly de rive d fro m Fitch So lutio ns Macro Re s e arch and inde pe nde nt s o urce s . Fitch Rating s '
analys ts do no t s hare data o r info rmatio n with Fitch So lutio ns Macro Re s e arch.

HO USEHO LD INCO ME DAT A (SO UT H KO REA 2 0 17 - 2 0 2 3)

Indicat o r 2017e 2018e 2019f 2020f 2021f 2022f 2023f

Ho us e ho lds , '0 0 0 20 ,474.8 20 ,714.3 20 ,9 54.8 21,19 6 .3 21,438 .4 21,6 8 0 .8 21,9 23.7
Ho us e ho lds , % y-o -y 1.6 1.2 1.2 1.2 1.1 1.1 1.1
Ave rag e wo rking adults pe r ho us e ho ld 1.8 1.8 1.8 1.7 1.7 1.7 1.6
Gro s s Inco me , pe r ho us e ho ld, KRW 58 ,9 9 8 ,6 0 8 .77 6 0 ,6 51,28 1.23 6 2,0 6 7,543.54 6 3,712,9 9 5.0 4 6 5,6 9 2,9 55.6 3 6 7,731,6 59 .50 6 9 ,9 37,8 9 4.45
Gro s s Inco me , pe r ho us e ho ld, USD 52,175.6 0 53,6 73.70 53,9 71.78 54,9 25.0 0 58 ,135.36 59 ,9 39 .52 6 1,8 9 1.9 4
Gro s s Inco me , pe r capita, KRW 32,0 11,8 25.8 33,0 9 5,157.2 34,0 22,6 57.7 35,124,6 20 .0 36 ,432,9 43.9 37,78 2,9 0 1.6 39 ,247,19 9 .9
Gro s s Inco me , pe r capita, USD 28 ,30 9 .76 29 ,28 7.75 29 ,58 4.9 2 30 ,279 .8 4 32,241.54 33,436 .20 34,732.0 4
Dis po s able Inco me , pe r ho us e ho ld, KRW 53,323,6 25.47 54,724,8 14.51 55,9 15,0 21.8 5 57,48 9 ,754.9 8 59 ,243,742.9 8 6 1,0 71,9 56 .73 6 3,0 79 ,9 47.21
Dis po s able Inco me , pe r ho us e ho ld, USD 47,156 .9 48 ,429 .0 48 ,6 21.8 49 ,56 0 .1 52,428 .1 54,0 46 .0 55,8 23.0
Dis po s able Inco me , pe r capita, KRW 28 ,9 32,6 58 .70 29 ,8 6 1,30 3.8 9 30 ,6 50 ,119 .8 8 31,6 9 3,78 2.31 32,8 56 ,246 .8 2 34,0 6 7,9 0 4.8 3 35,39 8 ,710 .78
Dis po s able Inco me , pe r capita, USD 25,58 6 .7 26 ,425.9 26 ,6 52.3 27,322.2 29 ,0 76 .3 30 ,148 .6 31,326 .3
Tax and s o cial co ntributio ns , % o f g ro s s inco me 9 .6 9 .8 9 .9 9 .8 9 .8 9 .8 9 .8
Tax and s o cial co ntributio ns , pe r capita, KRW 3,0 79 ,16 7.13 3,233,8 53.33 3,372,537.8 5 3,430 ,8 37.6 5 3,576 ,6 9 7.0 8 3,714,9 9 6 .74 3,8 48 ,48 9 .12
Tax and s o cial co ntributio ns , pe r capita, USD 2,723.1 2,8 6 1.8 2,9 32.6 2,9 57.6 3,16 5.2 3,28 7.6 3,40 5.7
Ho us e ho lds '0 0 0 Dis po s able Inco me USD5,0 0 0 + 20 ,46 9 .1 20 ,70 9 .3 20 ,9 49 .8 21,19 1.6 21,434.5 21,6 77.4 21,9 20 .6
Ho us e ho lds '0 0 0 Dis po s able Inco me USD10 ,0 0 0 + 20 ,39 3.9 20 ,6 41.7 20 ,8 8 2.7 21,129 .0 21,38 2.3 21,6 30 .8 21,8 79 .1
Ho us e ho lds '0 0 0 Dis po s able Inco me USD50 ,0 0 0 + 6 ,9 6 4.1 7,533.4 7,6 9 6 .5 8 ,154.1 9 ,36 2.3 10 ,10 2.0 10 ,8 9 9 .8
Ho us e ho lds Dis po s able Inco me USD5,0 0 0 + , % to tal ho us e ho lds 10 0 .0 10 0 .0 10 0 .0 10 0 .0 10 0 .0 10 0 .0 10 0 .0
Ho us e ho lds Dis po s able Inco me USD10 ,0 0 0 + , % to tal ho us e ho lds 9 9 .6 9 9 .6 9 9 .7 9 9 .7 9 9 .7 9 9 .8 9 9 .8
Ho us e ho lds Dis po s able Inco me USD50 ,0 0 0 + , % to tal ho us e ho lds 34.0 36 .4 36 .7 38 .5 43.7 46 .6 49 .7

e / f = F i tc h S o l u ti o n s e sti m a te / fo r e c a st. S o u r c e : N a ti o n a l so u r c e s, F i tc h S o l u ti o n s

This re po rt fro m Fitch So lutio ns Macro Re s e arch is a pro duct o f Fitch So lutio ns Gro up Ltd, UK Co mpany re g is tratio n numbe r 0 8 78 9 9 39
( 'FSG') . FSG is an affiliate o f Fitch Rating s Inc. ( 'Fitch Rating s ') . FSG is s o le ly re s po ns ible fo r the co nte nt o f this re po rt, witho ut any input fro m
Fitch Rating s .
Co pyrig ht © 20 19 Fitch So lutio ns Gro up Limite d. All rig hts re s e rve d. 30 No rth Co lo nnade , Lo ndo n E14 5GN, UK.