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[KH Explains] Mango bingsu prices continue to go up but why?By Shim Woo-hyun
Published : Aug. 23, 2023 - 16:08
High-end Korean hotels have continued to raise prices this year of mango bingsu, a Korean shaved ice dessert popular in the summer, despite mango prices having stabilized.
This year, Four Seasons Hotel Seoul sold its mango bingsu at 126,000 won ($94), 31.3 percent higher than last year. Shilla Seoul also raised the price of its progenitor luxury mango bingsu by 18.1 percent to 98,000 won, while Lotte Hotel increased the price by 4.5 percent to 92,000 won.
The price rally drew particular attention because local hotels initiated double-digit hikes in their mango bingsu prices for two straight years. In 2022, Four Seasons Hotel Seoul raised its mango bingsu price by 41 percent, while Shilla Seoul and Lotte Hotel Seoul made 30 percent and 47 percent price hikes, respectively.
The hotels say that since last year increasing inflationary pressure and rising ingredient prices have propelled the price hikes.
However, prices of mango, the main ingredient for the luxury bingsu, are actually lower this year.
According to Agro-Fisheries & Food Trade Corp. data, the average wholesale price of apple mango from Jeju Island was 47,920 won per kilogram on April 1, down from 52,750 won a year earlier.
The average wholesale prices in both 2022 and 2023 decreased in the following months, falling to around 30,000 won in August.
"Although I am aware that apple mangos are generally expensive, bingsu prices at five-star hotels seem a bit too much for me now," said a 35-year-old woman living in Seoul surnamed Kim.
Some, however, have said they are willing to suffer the cost to enjoy the bingsu and experience the ambience of the five-star hotels.
"When I visited the Shilla Seoul, the price of mango bingsu was around 70,000 (won), and I enjoyed it. Going there for the bingsu once or twice seems fine," a woman surnamed Lim, 30, said.
Although local hotels argue that the bingsu products have low margins due to high costs of the ingredients, experts say that luxury mango bingsu is a good marketing strategy tanks to its photoworthiness and social media-friendly nature.
"Young people visit the hotels, take pictures (of mango bingsu) and voluntarily post them on their social media accounts. There, hotels can benefit from indirect marketing," said Lee Eun-hee, a consumer science professor at Inha University.
Lee also noted mango bingsu is a "Veblen good," a term used to refer to a good for which demand increases as the price increases. Showing they can afford such products allows consumers to differentiate themselves from those unwilling to suffer the hit to the wallet.
Although the hotels have not disclosed their sales figures for their mango bingsu this year, they say sales have remained similar, despite the price hikes.
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