The economic impact of BTS and its global fan base, ARMY, may become more significant over time. The fans could boost Korea’s annual GDP by as much as 0.35 percentage points around 2040 as they grow older and gain purchasing power, according to a report.
NH Investment & Securities stated that the economic impact from fandom culture isn’t a short-term phenomenon and something that continues, using the case of BTS, in a report released Friday. The report was published as expectations grow that BTS’s upcoming concert in Busan could boost the regional economy.
The report cited previous examples such as the Beatles and Michael Jackson influencing Generation X and Beyoncé and Taylor Swift doing so for millennials and Generation Z consumers. The economic impact of those fandoms peaked when they entered their 30s and 40s, the report said.
The report also explained that consumption from fans can be categorized into three stages.
The first stage involves fans spending on streaming services, albums and merchandise. Consumption then expands into Korean consumer goods such as cosmetics, food and fashion. The final stage leads to tourism demand, with fans traveling to Korea and spending on hotels, restaurants, shopping and transportation.
The report’s scenario was based on the Hyundai Research Institute’s estimate that 800,000 BTS fans visited Korea in 2018. That figure represented about 5 percent of the group’s estimated global ARMY population of 20 million at the time.
NH Investment & Securities applied the same assumption that 5 percent of the estimated 86.5 million fans between the ages of 10 and 29 in emerging Asian and American countries would visit Korea.
Under that scenario, the report projected an additional 4.3 million tourists to visit Korea annually.
“A total of 84 percent of global ARMYs are currently in their teens or 20s, so their purchasing power remains relatively limited,” said Jung Yeo-kyung, a researcher at NH Investment & Securities.
“But once they enter their 30s and 40s and begin earning income, their consumption is highly likely to translate into tourism spending in Korea.”
Jung estimated tourism revenue from fans to be between $3.3 billion and $13.4 billion annually. This would add 0.1 to 0.35 percentage points to Korea’s annual GDP around 2040.
The report also cited the spending patterns of Korea’s so-called J-imprinted generation — people who grew up immersed in Japanese culture — as a comparable example.
Korean travelers visiting Japan reached 9.46 million last year, accounting for 22 percent of all foreign tourists to Japan.
“People now in their 30s and 40s who grew up with Japanese cultural content such as ‘Slam Dunk’ [1990], ‘Pokémon’ [1996] and ‘One Piece’ [1997] since the mid-1980s have gained purchasing power and actively traveled and consumed goods in Japan,” Jung said.
“Cultural preferences formed during adolescence can lead to a major wave of consumption 20 to 30 years later.”
Jung added that consumption driven by K-pop fandoms could become “a structural force” helping offset weakening domestic consumption amid low growth and rapid aging in Korea.
