As Korean fashion gains popularity overseas, including in Japan, it has entered a new growth phase. Hyundai Department Store Group has built The Hyundai Global, a platform that introduces emerging domestic brands abroad. Through this, it is pursuing global expansion via collaboration among distributors. Rather than simply recruiting fashion brands to enter Hyundai Department Store, it brings multiple brands together to negotiate with Japanese distributors. It is approaching the market with a "distribution-to-distribution" collaboration structure.
The Hyundai Global began with the experimental spirit of The Hyundai Seoul in Yeouido, Seoul, which opened in 2021. At the time, Creative Ground on basement level two featured emerging Korean brands rarely seen in traditional department stores, such as Coor and thisisneverthat, drawing attention.
On the 31st in Daechi-dong, Seoul, at Hyundai Department Store headquarters, Park Dong-yong, Head of Team of The Hyundai Global, met with ChosunBiz and said, "In 2021, there was an order from the CEO to 'fill basement level two of The Hyundai Seoul entirely with brands no one knows,'" adding, "For someone with 40 years of department store experience, is there any brand they don't know? It was an order to 'break the existing rules.'" Park added, "Consumers actually responded positively to the authenticity of those brands."
This kind of "experiment" was ultimately evaluated as proof of the potential that distribution can discover and nurture brands. The Hyundai Seoul has become a landmark for Millennials and Gen Z (born 1980–2004) consumers and overseas tourists. As brands that grew here sought to expand overseas, it naturally evolved into a "K-fashion platform." Hyundai Department Store opened its first regular store in Aug. in Shibuya Parco in Tokyo, Japan, called The Hyundai Global Tokyo.
Park, Head of Team, explained, "The Hyundai Global is a collaborative platform that oversees customs clearance, logistics, interior, and marketing by gathering domestic brands," and said, "When a single brand negotiates with a Japanese distributor, its bargaining power is weak, but if Hyundai Department Store brings multiple brands together to negotiate, we can secure far more favorable terms."
Hyundai Department Store is reviewing the establishment of additional stores in Japan within the year. It also plans to expand into Greater China and Europe. It secured execution capability by investing 30 billion won in Mediquarters, a domestic Start - Up that operates the Japanese fashion platform NUGU. Through this, it is professionally managing local distribution and marketing and creating an environment where domestic brands can focus on production and product capability.
Park, Head of Team, assessed, "Brands like Korea's 'three Ma' (Matin Kim, Marithe Francois Girbaud, Mardi Mercredi) are in the early stage where they can grow into global brands like Comme des Garçons or Issey Miyake in Japan." Park emphasized, "During Japan's bubble era, local department stores went overseas with domestic brands, protecting brand value and creating a 'win-win.' Now is the time for Korean brands and distribution to go out together." The following is a Q&A.
—What is The Hyundai Global's business structure and goal?
"For a single brand to do business overseas, it must go through complex processes such as licensing, wholesaler contracts, and customs clearance. Going through The Hyundai Global removes these barriers. From the brand's perspective, as long as it supplies goods domestically, it can immediately open a store in a promising Japanese department store. The initial goal is for the Hyundai platform to support and incubate brands going overseas. The key is to ensure the capabilities of K-brands are properly showcased in Japan. The long-term goal is to serve as a platform as a strong player in offline distribution and make it a revenue business. For now, we are at the stage of providing 'good experiences' to brands."
—Why choose Japan as the first foothold?
"Japan's fashion market is worth 100 trillion won, and online penetration is low. Korea's fashion market is smaller, and more than half of it is online. Because the online share is so large, brand life cycles are short. Five years at most. Japan is the opposite. With lower online penetration, brands have more room for long-term growth. We believed we could create a 'long-run stage' for Korean brands in Japan."
—What are the principles for brand selection and curation?
"We have collected data on sales, repeat visits, and overseas reactions from The Hyundai Seoul. The Hyundai Seoul aggregates information on Korea's trendy brands. With systematized data on overseas popularity, sales, and customer responses, we can select brands with potential for overseas expansion. Brands such as ORR, Stand Oil, and Insilence have participated in The Hyundai Global popup more than three times. When a brand voluntarily participates again, it means satisfaction is high. What we aim for is a structure where brands and distribution grow together rather than short-term sales."
—Where does The Hyundai Global fit within Hyundai Department Store's overall strategy?
"The Hyundai Global is Hyundai Department Store's first model in evolving into a 'brand builder.' If department stores once effectively played the role of landlords, now they become brands' global partners. If The Hyundai Seoul was a growth stage for domestic brands, The Hyundai Global is about moving onto the overseas stage. As brands establish themselves in Japan, Hyundai Department Store's buying power also increases. Ultimately, it is a structure where distributors and brands win together. The overseas expansion potential that distribution provides also works as buying power for distribution."
—How do strategies differ by country?
"Japan is conservative and highly competitive, so caution is more important than speed. Once you secure a spot, it lasts a long time. In Greater China, the market size is much larger than the number of competitors, so the key is to select quality partners. Europe is in the testing stage, and we are considering a model that expands from one base to other bases."
—What is the background to the Mediquarters investment?
"Setting up a local subsidiary directly reduces speed and efficiency. Timing is critical in business, and we judged that the most efficient approach was to support competitive Start - Ups. We secured execution by investing 30 billion won in Mediquarters, a domestic Start - Up that operates the fashion platform NUGU in Japan. Hyundai supports Start - Ups, and Start - Ups in turn support numerous Korean brands, creating a virtuous cycle."
—What is the five-year roadmap?
"We plan to open one or two regular stores each year in major Japanese cities. We will expand step by step around key commercial districts such as Osaka and Nagoya. After that, we aim to expand into Greater China, including Taiwan and Hong Kong, and in the long term to Europe. The Hyundai Global is not a simple export channel. We will serve as a 'distribution laboratory' that helps Korean brands achieve sustainable growth overseas."