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If you want to fit in among the people who linger in the cafés and boutique shops of Seoul's Tehran Boulevard, do yourself a favour and don't dance like you're riding a horse.

Tehran Boulevard's eight lanes run through the heart of Gangnam, an upscale district of the South Korean capital that happens to have one of the most overused and poorly understood names on the planet.

To most of the world, "Gangnam" is just the word between "hey sexy lady" and "style" in the chorus of the Korean pop song that unexpectedly became the biggest hit of 2012. The video, in which rapper Psy gets bowlegged and crazy all over Seoul, has become the most watched YouTube clip of all time, surpassing one billion views on Dec. 21.

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It's spawned countless tribute and parody videos, with everyone from NASA scientists to American troops in Afghanistan recording and uploading their own versions of the dance.

Psy has said that, for him, the song title means "dress classy, dance cheesy." But in South Korea, having Gangnam style means to be among, or at least to behave like, the city's privileged nouveau riche.

The Gangnam neighbourhood (the name means "south of the river" – and until recently south was the wrong side of the Han River to live on) has been transformed over the past three decades from an area where farmers grew cabbage and pears on the outskirts of Seoul proper into an affluent 40 square kilometres that is at once the Silicon Valley and the Beverly Hills of South Korea.

Here in Seoul, saying you've got Gangnam style means you can afford the $10,000-per-square-metre cost of real estate (only 1 per cent of South Koreans live in Gangnam). It also means you're willing to spend piles to put your kids in the local schools, considered the best in the country. It's where international companies like Google, Toyota and IBM have their South Korean head offices.

"If someone says he's from Gangnam, you know he must be rich. And if they actually say, 'I'm from Gangnam,' you know they're proud of it," said Oh Han-jong, a 54-year-old who lived in Gangnam until his travel business went bust. He now works as a driver and lives in another part of town. Despite his poor turn of fortune, Mr. Oh remains "proud I was able to keep my kids in Gangnam schools."

Most people come to Gangnam only to browse and ogle. "Gangnam is not quite Beverly Hills, but it's probably the closest that Korea has," said Hans Schattle, associate professor of political science at Seoul's Yonsei University. "It's a place for upscale women to shop and spend the money their husbands made, or maybe they themselves made."

Or as the 34-year-old Psy put it in the song's lyrics: "A classy lady who can afford a relaxing cup of coffee, but whose heart starts burning when night comes."

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Psy (short for "psycho" – the singer's real name is Park Jae-sang) returns to the cup of coffee later, boasting playfully that he can down his own "boiling cup" in one shot. But he's ridiculing, rather than romanticizing, the Gangnam life. Many Koreans see Gangnam's numberless coffee shops – where a cup of java can cost several times as much as a full meal in other parts of Seoul – as a symbol of pointless, conspicuous consumption.

"People from Gangnam live the way they want," said Lee Tae-jin, a 39-year-old theatre actor who lives in the area. "Psy is a very good symbol for Gangnam. Even though he's not handsome, he's individualistic."

The video suggests Psy doesn't think Gangnam style is as wonderful as it seems. In the opening shot, he's reclining – in a white shirt and pink trousers – in what appears to be a beach chair on perfect white sand. Then the camera angle widens and you can see he's actually lying in a children's playground. Later, he appears to be luxuriating in a five-star swimming pool that turns out to be a public bath.

"Psy is making fun of people that are so vain and materialistic," Jea Kim, a Korean living in Minnesota, wrote on her blog. "Most Koreans are fed up with all those 'nouveaux riches' in Gangnam who became rich because their real-estate values skyrocketed overnight."

So are Koreans sick of the song yet? Not quite, it seems, although there are signs that moment is imminent. First of all, Park Geun-hye, the country's new president-elect, used it during her campaign, even attempting to do the horse dance – surrounded by back-up dancers dressed in red – at one election stop. A politician using a pop song, anywhere in the world, means the end of its coolness is certainly nigh.

Even Ms. Park seemed to sense this. In the last days before her narrow election win, she was no longer doing the horse dance on the campaign trail. The girls in red were still dancing as the candidate left the stage, but they were doing the Macarena.

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