Chanel sunglasses resting upon perfectly-permed hair at Apgujeong. A Louis-Vuitton bag in hand. Dress from a Karosu-gil boutique, stilettos from an Italian-sounding brand. And there you have it—a veritable toenjangnyeo (a person who scrimps on essentials to over-spend on conspicuous luxuries).
▲ A veritable toenjangnyeo,clad from head to toe in conspicuous luxuries
Eating ramyon (ramen) for lunch and washing it down with a Starbucks twice as expensive for dessert may seem ridiculous to the average person, but for toenjangnyeos the case would be different. The idea behind the term is that such people would prefer to eat a cheap meal (considering that toenjang jjigae is an inexpensive food in Korea) if it means they can buy a Starbucks latte (often revered as a symbol of wealth because of its excessively high price) purely for the sake of showing off their "wealth" to other people. Of course, the overspending on conspicuous luxuries is not limited only to food, but to all parts of life. A true toenjangnyeo would be clad head to toe in instantly recognizable brand-name luxuries, and post pictures of herself on Facebook eating at expensive restaurants, regardless of the effects such consumerism wreaked on her finances. In recent years, such toenjangnyeos became a highly spotlighted issue when it came to the consumer patterns of Koreans in their 20s and 30s.
▲ The top four social commerce sites in Korea. Provided by seoulspace.co.kr
Toenjangnyeos gradually rose to prominence from the year 1997 and onward, with the Kim Dae-jung Administration forming policies around the slogan "spending is a virtue." Experts thought that consumption was crucial to the country’s economic growth because it was only through steady consumption that companies could produce goods as well as jobs. Thus, the Kim Administration streamlined the application process for credit cards in the hopes of encouraging spending. The administration’s plan was a huge success, and consumption within the Korean economy increased considerably. Unfortunately, the change also provided the basis for wasteful, excessive spending—toenjang-ism, for short.
▲ The modern-day ganjangnyeo,armed with coupons and information technology
Interestingly enough, however, trends are changing. Gone are the days of toenjangnyeos—nowadays, ganjangnyeos rule supreme. Hit by the effects of the global economic crisis, Korean consumers have no choice
but to tighten their budgets, thus leading to ganjang-ism. The term "ganjang" (soy sauce in Korean) implies that the person involved is stingy (as Koreans use the word "salty" to refer to penny-pinchers); however, this is not necessarily true. Ganjangnyeos are people who make conscious efforts to spend money more efficiently. They do anything but forsake style to save money; rather, they make wiser use of their money, searching around for bargains and taking advantage of sales and special offers.
Lee So Yoon (’12, Food and Resource Economics) said that she often uses social commerce sites like Coupang during her daily life. She related how she once ate at the family restaurant T.G.I.F with a couple of friends using Coupang; the three girls were able to eat a meal priced at 92,600 won for a mere 62,000 won. "Finding such offers on social commerce sites and purchasing them online is far from difficult. As a frequent user of social commerce sites, people who needlessly waste money paying the full price seem somewhat lazy and foolish," admitted Lee.
▲ SPA brands in Korea. Provided by kpophostel.com
She certainly has a point. The products offered at discounted prices in social commerce sitesare not of lower quality than those offered at their original prices—they are exactly the same. Why would companies willingly sell their products at a lower price, you may ask? Because by selling a certain number of their goods at a low price, companies can lure customers who will try out their products, recommend them to their acquaintances, and possibly even repurchase the same product at its original price. Thus by forgoing the market price of a few products, companies can enjoy the effects of indirect advertisement without having to make large-scale investments in costly direct promotion.
Market players other than social commerce sites are also changing their marketing strategies to target the increasing number of ganjangnyeos in the Korean economy. Cosmetic companies are releasing products in large jumbo sizes that are comparatively less expensive than their smaller counterparts, Specialty store retailers of Private label Apparel (SPA) brands are releasing "cheap chic" lines of clothing, and family restaurants promote set menus below 10,000 won.
▲ Professor Sung Young Shin (Department of Psychology). Photographed by Kim Na Young
"While in the past, people regarded cutting down on their desires to be the most rational form of consumption, the concept delineating the most reasonable form of consumption has changed," says Professor Sung Young Shin (Department of P s y c h o l o g y ) . W i t h d i v e r s e i n f o r m a t i o n depots such as the Internet and social networking sites at their disposal, modern-day reasonable consumers maximize utility not by abstaining from their desires but by changing their lifestyles and consumption patterns," Sung added. This change can be seen from the increasing tendency among Korean consumer s to use discount coupons during recent years. Shinsegae Department Store alone reported an 11 percent increase in the sales of coupon-related products last year. Whereas a penny-pincher would only look around and refrain from making any purchases and a toenjangnyeo would buy first and worrylater, ganjangnyeos would make the best use of their time and resources.