As the economic recession continues, the fashion industry is also seeing a rise in popularity for ultra-cost-performance stores. E-Land's distribution-type SPA (manufacturing and distribution integrated) brand 'NC Basic', workwear and camping clothing brand 'Workup', and the edited store 'NYU NYU', which gathers assorted items from wholesale markets, are representative examples.
These companies, dubbed the 'Daiso of the fashion industry', drastically lower prices through a small variety mass-production method and have opened stores in key commercial areas, gaining responses from trend-sensitive young consumers.
According to the distribution industry on the 3rd, the distribution-type SPA brand NC Basic operated by E-Land Retail saw sales last month increase by 133% compared to the same period last year. Basic products, such as T-shirts priced at 5,000 won and jeans at 19,900 won, are being sold relatively cheaply.
80% of all products are priced under 30,000 won, which is about half the price compared to existing global SPA brands. The reason prices could be lowered is that the distributor directly plans the products and produces them through factories owned by fashion corporations to supply them to their channels, including department stores, outlets, and large supermarkets.
This summer, sales of a 9,900 won bra top increased sevenfold compared to the same period last year. During the same period, sales of jeans including summer cool denim priced at 19,900 won increased by 104%, and a three-pack set of men's T-shirts priced at 9,900 won saw an increase rate of 126%.
An E-Land official noted, "Sales are increasing as word spreads about the high-cost performance products without advertising or marketing," adding, "Especially, the sales of underwear at the lowest offline market level account for 32% of total sales, making it quite popular."
Workup, operated by Dae Myung Chemical's Trading Post, is expanding as a low-cost workwear sales outlet. Since opening its first store in February last year, it has opened more than 120 stores. There is also a store in Seongsu-dong, known as the 'Mecca of fashion.'
This store offers clothing suitable for work or outdoor activities, as well as industrial shoes and equipment. Functional T-shirts are priced in the 10,000 won range, pants in the 20,000 won range, and jackets in the 30,000 won range. Safety shoes are available starting from the 30,000 won range up to the low 100,000 won range. Various patches for decorating workwear, considering the tastes of young workers, are also sold.
They have lowered prices by producing their private brand (PB) products through a 'small variety mass production' method. They consist of PBs like workwear 'Black Armor', unisex casual 'Kenta', 'Detroit', and daily casual 'Workup'. They are also supplied with licensed brands such as 'Volcom', produced through Dae Myung Chemical's fashion subsidiary.
The accessory edit shop NYU NYU sells products from the Dongdaemun and Namdaemun accessory wholesale markets at wholesale prices. They handle over 30,000 trendy miscellaneous items, including jewelry, glasses, hats, bags, and keychains. The lowest prices for hairpins, earrings, and rings are 1,000 won, while keychains are 1,500 won and glasses are 3,900 won.
This company has established a strategy of operating large stores in key commercial areas such as Hongdae, Seongsu, Gangnam, and Myeongdong, successfully appealing to customers in their teens and twenties. In the case of the three-story Seongsu store, they recently expanded their product line to include clothing, glasses, and living products. Given that it is an area with many foreigners, they have installed WeChat Pay, Alipay payment systems, and tax-free devices in the store.
Daiso, a uniform-priced daily goods store, also saw clothing sales increase by 160% in 2023 compared to the previous year, following a 34% increase last year. The price of their representative product, Le Kaff short-sleeve T-shirts, is 3,000 won, and Skechers socks are priced between 1,000 and 2,000 won.
An industry official in the distribution sector said, "As the economic recession continues, the Daiso-style distribution method is becoming established across the offline market," adding, "The fashion industry, which has focused on trends and sensitivity, is also in a mood to secure price competitiveness."