South Korea’s consumers are adapting to the evolving economic landscape by showing a continued interest in premium fashion, including used luxury items and the emerging trend of “quiet luxury.” This shift coincides with a slowdown in Asia’s fourth-largest economy and a decline in the local resale market, primarily affecting younger millennials and Gen Zers.
Gugus Co., a local platform specializing in used luxury goods, reported a 22% year-on-year increase in transaction volume during the April-June period, reaching 44.7 billion won ($35.4 million), marking a record high for a single quarter.
Trenbe Inc., a prominent Korean premium fashion e-commerce platform, revealed that sales of secondhand goods made up 22% of its total revenue in June, doubling the 11% share from the previous year’s June.
The growing prominence of “value for money” is becoming a significant trend in the luxury market, according to a source in the retail industry in Seoul.
Simultaneously, the affluent segment of the population, less affected by the economic slowdown, is expressing an interest in “quiet luxury” brands that are not widely recognized. These emerging designer labels offer a distinct take on minimalist and modern design.
Luxury brands such as Delvaux, Loro Piana, Valextra, and Berluti have become favorites among the well-off, who opt for discreet opulence without conspicuous logos, as noted by industry sources.
This shift in consumer preferences reflects the desire for high-end designer labels that remain exclusive to a select few, in contrast to the popularity of widely recognized luxury items seen at various events.
Shrinking Resale Market Amid Economic Slowdown
Conversely, the South Korean luxury resale market has experienced a decline as the economic slowdown has compelled younger consumers, particularly millennials and Gen Zers, to be more financially cautious.
In the years 2020-2022, Korea’s secondary market for luxury goods experienced significant growth, with customers willing to pay substantial premiums for designer products, even those with intact price tags and original packaging.
This growth was partially attributed to certain high-end fashion houses, including Hermes International S.A., Louis Vuitton Malletier, and Chanel Inc., implementing Korea-specific policies. These policies restricted the sale of popular items to customers without previous purchase records due to limited supplies, as stated by retail industry sources in Seoul.
“Young rookie luxury goods customers were familiar with the resale market, as it was more convenient for them compared to buying from official stores,” explained one of the sources.
However, this boom has receded in the current year due to a sluggish domestic economy, causing many of these young customers to exit the market altogether.
Discounts on Luxury Goods in the Resale Market
Kream, the resale platform of South Korea’s online giant Naver Corp., reported just 58 transactions involving premium items in the first half of this year, marking a significant drop from the previous year.
Furthermore, the value of luxury goods in the resale market has declined. For instance, Chanel’s signature Medium Classic Double Flap Bag with silver hardware is now selling for as low as 12 million won in the local resale market, which is 17% less than the official price of 14.5 million won. This represents a substantial decrease from the premiums it commanded last year.
Similarly, a Medium Lady Dior Bag sold for 7 million won last month on the resale market, a 13.6% discount from the official price tag of 8.1 million won.
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