Gugus, South Korea’s prominent online retailer specializing in secondhand luxury goods, demonstrated notable growth in revenue and transactions during the first quarter of this year. This success contrasts with the broader trend of a slowdown in spending within the high-end goods market.
In the first quarter, Gugus experienced a 16% year-on-year increase in transactions, totaling 62.4 billion won ($46 million), marking its highest-ever performance for a single quarter. Notably, sales growth was particularly strong in clothing and jewelry categories, which saw increases of 24% and 38%, respectively.
The company’s upward trajectory follows a robust performance in 2023, where it recorded a 19.7% rise in merchandise transactions, amounting to 215.3 billion won compared to the previous year’s 179.9 billion won.
Kim Jeong-nam, CEO of Gugus, attributes this growth to the increasing activity in secondhand transactions, particularly in prestigious brands such as Hermes, Louis Vuitton, and Chanel. He anticipates that transactions at Gugus will exceed 300 billion won by the end of the year.
In 2023, Gugus reported a 46% increase in revenue to 58.9 billion won ($43 million) compared to the previous year’s 40.3 billion won. This positive performance stands in stark contrast to the significant sales decline experienced by domestic luxury goods platforms like Trenbe and Balaan, which suffered operating losses amid economic challenges such as inflation and high borrowing costs.
Gugus has positioned itself as a leader in the online market for pre-owned luxury products, leveraging its network of 26 brick-and-mortar stores across South Korea. By strategically locating stores in proximity to popular luxury shopping destinations, the company offers customers the convenience of inspecting items in person before purchase.
With a focus on authenticity and quality, Gugus boasts a rigorous verification process for its products, minimizing issues related to counterfeit goods. Last year, over 60% of Gugus transactions involved ultra-high-priced items from renowned brands like Hermes, Louis Vuitton, and Rolex.
Looking ahead, Gugus aims to expand its offline presence by opening its first outlet within a department store in Suwon, Gyeonggi Province. Additionally, the company is enhancing its digital accessibility by developing multilingual websites in English, Japanese, and Chinese.
Furthermore, Gugus plans to tap into foreign markets by becoming the first South Korean used luxury goods platform to sell products on international online marketplaces, including Tmall. Collaborations with companies in Japan and the Middle East signal its ambition to explore business-to-business opportunities and attract a global clientele.
Despite a slight decline in net profit in 2023, Gugus remains optimistic about its growth prospects, fueled by its commitment to quality, innovation, and expanding market reach.
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