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A country once defined by rationing lines and famine memory is now home to nail salons, coffee shops, water parks and multi-story malls stocked with foreign brands, real and counterfeit alike. The shift did not happen by accident. It reflects a calculated bet by Pyongyang that channeling consumer spending through state-approved outlets is safer for the regime than letting that money keep flowing through the informal markets that have quietly run North Korea’s economy for three decades.
Those informal markets, known as jangmadang, trace back to the famine of the 1990s, when the state’s public distribution system collapsed and ordinary people had to start trading to survive. What began as a survival mechanism hardened into a parallel economy. A merchant class known as donju, meaning masters of money, emerged from that system, building wealth through trade, real estate and moneylending largely outside official channels. For years the government tolerated jangmadang because it had no better alternative for feeding the population, even as the markets steadily eroded the state’s grip on economic life.
The mall boom now underway in Pyongyang looks like an attempt to reverse that dynamic. Department stores such as Pyongyang Department Store No. 1, the Rakwon and the Kwangbok have expanded their offerings of foreign clothing, cosmetics and bags, some genuine imports and many counterfeit, sold mostly in foreign currency. More recently, new shopping complexes have gone up featuring imitation Ikea furniture showrooms and coffee shops mimicking Starbucks branding, catering to a narrow but growing slice of the population with money to spend. None of this is cheap by North Korean standards, and none of it is available to most of the country. But for the elite and an emerging urban middle class, it represents a version of consumer life that would have been unthinkable a generation ago.
The logic behind encouraging this kind of spending is straightforward from the regime’s perspective. Every won spent in a state-run department store or state-linked leisure facility is money that stays inside channels Pyongyang can tax, monitor and profit from directly. Every won spent in a jangmadang stall, by contrast, strengthens a merchant class that owes its wealth to informal trade rather than state favor. By building out malls, amusement parks, ski resorts and water parks, and by promoting leisure activities like golf and horseback riding as acceptable pursuits for ordinary citizens, the state is effectively competing with its own black market for the same consumer spending. It is also a release valve. A population with access to convenience and small luxuries, even tightly rationed and state-mediated ones, has less immediate reason to test the boundaries of what the regime allows.
There is a generational angle too. North Korea’s so-called jangmadang generation, people who came of age during and after the 1990s famine, grew up with markets as a normal part of daily life and with far more exposure to outside information than their parents did. Smartphone use has expanded even under heavy restrictions, and demand for goods that have nothing to do with survival, from imported cosmetics to specialty coffee, has grown alongside it. State planners appear to have concluded that this appetite is not going away, and that the safer move is to feed it through officially sanctioned channels rather than leave the field entirely to informal traders.
None of this amounts to liberalization in any conventional sense. North Korea remains one of the most tightly controlled societies on earth, and access to consumer goods and leisure facilities is still stratified sharply by wealth, location and political standing. Most of the population, particularly outside Pyongyang, has seen little benefit from any of this. What has changed is the state’s tactical approach to consumption itself. Rather than treating spending on non-essential goods as something to suppress outright, the leadership now appears to be trying to capture and redirect it, squeezing the informal economy that grew out of necessity while offering just enough visible comfort to keep a restless urban middle class invested in the system rather than working around it.
Whether that strategy holds is an open question. Informal markets became entrenched precisely because the state could not meet basic needs on its own, and donju wealth did not develop by accident, it developed because there was demand the formal economy failed to serve. Pyongyang’s new malls and leisure venues may capture some of that demand, but they are unlikely to eliminate the underlying market forces that produced jangmadang in the first place. For now, the more visible outcome is a strange coexistence: a state still defined internationally by sanctions and deprivation, quietly building out a consumer culture designed to keep its own citizens spending on the government’s terms.
