The apparel recommerce market is heating up. In the past, consumer-to-consumer (C2C) platforms were the focus, but recently department stores and major fashion corporations have been jumping in. The rise of value-for-money consumption amid prolonged high inflation and an economic downturn is the backdrop.
According to the industry on the 9th, Musinsa, the country's largest fashion platform, launched Musinsa Used in Aug., a service that brokers clothing product transactions. When customers send clothes to Musinsa, the company handles product photography and listing, as well as cleaning and shipping. Settlement proceeds are deposited into the customer's Musinsa Money account. It is a so-called C2B2C model (a method in which consumers sell goods to other consumers through corporations).
Users are on the rise. According to Musinsa, as of Oct., Musinsa Used's transaction value more than tripled from the previous month. During the same period, the number of Musinsa Used product listings increased 67%, and the number of members purchasing products rose 2.5 times. A Musinsa official said, "Used goods from brands that are not on Musinsa, such as Uniqlo, Zara, and H&M, are also being transacted," and noted, "We currently handle only apparel, but plan to expand categories to shoes and bags later."
LF Corp. also teamed up with the used-business specialist Start - Up Madeleine Memory in Sept. and opened the resale service Elli Market. Users can transact used goods from 15 LF brands, including Hazzys, Maestro, and Vanessa Bruno. Kolon Industries FnC division is running OLO Relay Market, and F&F is operating Discovery Remarket.
Department stores have also entered the sale of used apparel. Lotte Department Store and Hyundai Department Store are operating services that collect used clothing from department store customers and return an amount matching the market price as department store points.
The reason major fashion corporations and department stores are entering used apparel sales is to attract Generation Z (those born from the late 1990s to the early 2010s), who prefer taste and values and rational consumption over brand names. According to a survey by market research company Embrain Trend Monitor of 1,000 men and women ages 13 to 59, 78% of respondents had experience with used apparel transactions. By age group, people in their 20s were the most at 68%.
Used transaction items are also diversifying. In the past, when it came to used transactions, the typical pattern was paying a premium for hard-to-find fashion items such as limited-edition sneakers or luxury goods, but recently, inexpensive SPA (manufacturing and distribution integration) brand items like Uniqlo are being transacted at more than 50% below regular prices.
Used transaction services also have the advantage of increasing platform dwell time and creating a virtuous cycle that locks in customers. Accordingly, most corporations credit the proceeds from used apparel transactions as money or points usable on the platform to encourage the purchase of new products.
Recently, as interest in K-fashion has grown, overseas consumers who buy Korean fashion products directly on used platforms have emerged. A Bungaejangter official said, "On our global mall (Bunjang Global), recommerce transactions of K-fashion brands such as Gentle Monster, Matin Kim, and Mardi Mercredi are active overseas."
According to the Korea Internet & Security Agency (KISA), the domestic used-transaction market is expected to grow from 26 trillion won in 2023 to 43 trillion won this year. The industry estimates that about 5 trillion won of this will come from used apparel transactions. ThredUp, the world's largest used apparel platform, projected that the global used apparel market will grow 12% annually to reach $350 billion (about 507 trillion won) by 2028.