In South Korea, it is now possible to obtain gold bars as easily as one could buy energy drinks. Since September 2022, gold vending machines have been installed in shopping centers by the company GS Retail. They are accessible in self-service and are also widely used by citizens! Interestingly enough, most buyers are people in their 20s and 30s. This finding puts the debate on access to physical precious metals back on the table.
The crazy project of GS Retail
GS Retail is a South Korean retail company based in Seoul. It has more than 10,000 convenience stores across South Korea. This company has noticed people’s interest in precious metals. Thus, in September 2022, it had vending machines installed in five of its stores.
GS Retail vending machines work on the same principle as conventional machines. They offer five different sizes of gold bars, ranging from 0.13 ounce (4 g) to 1.3 ounce (40 g). The 0.13 ounce format sells for around $225 and is the best-selling one.
Impressive numbers that speak for themselves
In less than a year after their installation, the vending machines of gold bullion have a resounding success with consumers. From September 2022 to May 2023, the total amount of sales was estimated at $19 million! This number is just impressive.
Something else. A representative of GS-Retail told the press that “people between the ages of 20 and 30 seem to be the main buyers of physical gold“. The latter have a preference for the smallest format of gold bullion.
At present, GS Retail has had 29 vending machines installed. The company plans to increase this figure to 50 by the end of the year to better cover demand.
These performances are regarded with a skeptical eye by Lee Eun-hee, professor of consumer studies in the department of consumer sciences of Inha University of Incheon. He considers that “buying a gold bar in a convenience store seems to be more of a fun activity than a means of serious investment“.
Several experts agree with him on this fact. On the one hand, their position is not lacking in veracity, when we know that South Korea is reputed to have a fairly high cost of living. Thus, the popularity of these gold bars would be due to their ease of access.
A means of protection against inflation and economic pressures
Persistent inflation, depreciating currencies and banking crises in the United States and Europe have affected consumer confidence. They now see precious metals, and especially gold, as a “safe haven” that will allow them to protect their long-term assets.
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 that are constantly looking for a way to get their hands on traditional savings. It is not debt-based.
Moreover, it is interesting to point out that in South Korea, gold has a rather special importance. It is generally offered to the newlyweds as well as to young children. This cultural practice also explains the success of the gold bullion vending machines installed by GS Retail.
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