Shinsegae Group's women's fashion and beauty platform W Concept is stepping up its overseas expansion by strengthening a dedicated global unit. W Concept plans to increase the number of brands on its global mall and roll out localization strategies for each country to actively secure customers.
According to the retail industry on the 1st, Shinsegae Group created a new global division for W Concept through regular executive appointments on the 26th of last month. It elevated the department that had overseen overseas business to enlarge the organization. A W Concept official said, "We reorganized the related unit with the aim of expanding our overseas business."
Along with this, W Concept split its existing merchandising division into Merchandising 1 and Merchandising 2 to boost expertise and competitiveness in product sourcing. The Merchandising 1 team will oversee contemporary, casual, beauty, and lifestyle, while Merchandising 2 plans to focus its capabilities on private brand (PB) and outdoor.
W Concept's push to strengthen its overseas business stems from the recent rise in recognition of K-fashion and beauty as Korean drama and films gain popularity abroad. In the first half of this year, W Concept roughly tripled the number of brands on its global app from a year earlier and enhanced service quality while running various promotions.
Buoyed by these efforts, W Concept's global sales in the first half of this year rose 20% from a year earlier. Sales growth rates were Singapore (31%), Japan (20%), United Arab Emirates (170%), and France (60%). Growth was steady across major countries in Asia and Europe. During the same period, monthly active users (MAU) and cumulative members of W Concept's global mall increased 27% and 12%, respectively, from a year earlier.
Some observers say W Concept's global expansion is mindful of the moves by industry leader Musinsa. Musinsa has said it aims to enter overseas markets starting with China in the second half of this year, followed by Japan, Singapore, and Thailand. To that end, Musinsa recently set up a joint venture with China's Anta Group and began targeting the local offline market.
W Concept and Musinsa were both selected as "specialized trading companies" by the Ministry of Trade, Industry and Energy in July, laying the groundwork for global business expansion. The specialized trading company system designates export-specialized corporations with overseas networks and export capabilities to act on and support overseas expansion. Companies designated as specialized trading companies can receive incentives for various support programs run by the government.
W Concept was once the No. 1 women's fashion platform. It was acquired by Shinsegae Group in 2021. However, competition is intensifying with fashion platforms targeting young women such as 29cm, Zigzag, and ably, similar to W Concept.
W Concept's sales rose from 52.6 billion won in 2019 to 71.7 billion won in 2020, 101.4 billion won in 2021, 136.8 billion won in 2022, and 145.5 billion won in 2023, but fell to 116.9 billion won last year from the previous year. Although it has maintained an operating profit for five consecutive years, overseas performance has become crucial for additional growth.
W Concept plans to overhaul its global mall in the second half and target overseas markets with Japan as a key base. According to data analytics firm Euromonitor, this year Japan's fashion market is projected at 8.25 trillion yen (about 78 trillion won). That is about 1.6 times the size of Korea's fashion market.
W Concept revamped the UI and UX of its global mall by introducing Japanese-language search and an artificial intelligence (AI) auto-translation system. It also supports Google Pay, Apple Pay, Amazon Pay, and Alipay as payment methods, creating an environment where global customers can shop conveniently.
A W Concept official said, "We plan to expand the lineup of onboarded brands and strengthen various localization marketing activities, including collaborations with local influencers," adding, "We will continue serving as a bridge to introduce K-fashion and beauty to the global market."