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South Korea: Young people buy gold bars from vending machines!

Mon 07 Aug 2023 ▪ 4 min of reading ▪ by Luc Jose A.
Getting informed Invest

In South Korea, gold bars can now be purchased as easily as energy drinks. Since September 2022, gold vending machines have been installed in shopping malls by GS Retail. They are accessible on a self-service basis and are very popular with the public! Interestingly, most shoppers are in their twenties and thirties. This brings the debate about access to physical precious metals back onto the table.

Gold bullion

GS Retail’s crazy project

GS Retail is a South Korean retail company based in Seoul. It has over 10,000 convenience stores across South Korea. The company noticed the public’s interest in precious metals. So, in September 2022, it installed vending machines in five of its stores.

GS Retail’s vending machines operate on the same principle as conventional machines. They offer five different sizes of gold bars, ranging from 0.13 ounces (4 g) to 1.3 ounces (40 g). The 0.13-ounce size sells for around $225 and is the best-selling.

Impressive figures that speak for themselves

In less than a year since their installation, gold bullion vending machines have been a great success with consumers. From September 2022 to May 2023, total sales were estimated at $19 million! An impressive figure.

Furthermore, a GS Retail representative told the press that “people in their 20s and 30s seem to be the main buyers of physical gold”. The latter have a preference for the smaller format of gold bullion.

Currently, GS Retail has installed 29 vending machines. The company plans to increase this number to 50 by the end of the year to better cover demand.

This performance is viewed skeptically by Lee Eun-hee, Professor of Consumer Studies in the Department of Consumer Science at Inha University in Incheon. He considers that “buying gold bullion in a convenience store seems to be more of a fun activity than a serious investment”.

Several experts agree with him. On the one hand, their position is not lacking in veracity, given that South Korea is reputed to have a fairly high cost of living. Thus, the popularity of gold bullion is due to its ease of access.

Protection against inflation and economic pressures

Persistent inflation, currency depreciation and banking crises in the United States and Europe have undermined consumer confidence. They now see precious metals, and gold in particular, as a “safe haven” that will enable them to protect their wealth over the long term.

In this period of economic uncertainty, gold confirms its position as a “safe haven”. It now appears as a safe and “free” asset, in the face of political institutions constantly looking for a way to get their hands on traditional savings. It is not based on debt.

It’s also interesting to note that in South Korea, gold has a special significance. It is generally given to newlyweds and young children. This cultural practice also explains the success of the gold bullion vending machines installed by GS Retail.

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Luc Jose A. avatar
Luc Jose A.

Graduated from Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I committed to raising awareness and informing the general public about this ever-evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. Every day, I strive to provide an objective analysis of the news, decipher market trends, relay the latest technological innovations, and put the economic and societal issues of this ongoing revolution into perspective.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.