Vertical commerce companies like Musinsa and Kurly that sell specific product categories are actively strengthening their Living category. It has been noted that the trend leadership has shifted to fashion vertical commerce as the existing strong players such as 10x10 and 1300K have lost competitiveness due to the T-mall (Tmon·WEMAKEPRICE) situation.
The strengthening of the Living category is due to the sustained growth of the living market, propelled by the home decoration trend that expanded after the COVID-19 pandemic. Living serves as a cash cow, especially because of its relatively high average transaction value and stable demand.
According to the Statistics Korea, the domestic living market size, which was only 10 trillion won in 2010, grew to 13 trillion won in 2015 and is believed to have approached the 20 trillion won mark last year. The online transaction volume of furniture and interior products was about 5.4 trillion won for 2023, an increase of approximately 7.4% compared to the previous year. It is expected to expand to about 7 trillion won this year.
The growth of the living market is attributed to the increase in time spent at home following the pandemic, leading to a rising demand for improving the quality of space. Additionally, the recent real estate market slump has reduced the demand for moving, and prolonged high prices are changing consumption patterns. Instead of expensive large furniture or interior renovations, there has been a surge in demand for cost-effective items to decorate homes modestly.
In response, e-commerce has also begun to reinforce its Living category. In particular, there is a clear trend of expanding categories within vertical platforms for e-commerce, similar to how beauty categories were rapidly adopted.
Products in the Living category have low cost ratios and are easy to store, making them a suitable category for generating more profit compared to categories like fresh food. Additionally, many household items tend to be relatively high-priced, resulting in a higher average transaction value. Furthermore, the loss of competitiveness among existing lifestyle platforms like 10x10 and 1300K due to the T-mall situation has also impacted the landscape.
29CM, operated by Musinsa, is also keen on expanding its lifestyle category. It is currently operating an offline flagship store called 'TTRS.' Currently, more than 40% of total sales come from the lifestyle category.
Kurly is also strengthening its Living category by recently bringing in various premium brands exclusively and showcasing a range of products. Kurly's Living category sales doubled in the first half of 2024 compared to the same period last year. Notably, sales of Living products delivered directly by sellers through third-party delivery have grown 14 times, driving overall growth.
W Concept operates a 'Home' category that encompasses various lifestyle products including furniture, storage, and kitchen items. Over the past three months (from October to December 2024), sales from the Home category increased by 23% compared to the same period last year. Sales in the Home category reached a 10% increase from the previous year in 2023 and are expected to grow by 40% in 2024, showing consistent growth.
A distribution industry official noted that as customer preferences become more fragmented, there is a shift from seeking standardized products to prioritizing individuality with 'NANO preferences' reflected in consumption. Furthermore, going through the pandemic has increased customer discernment regarding furniture, kitchenware, and household goods, resulting in a rise in demand for various design products.