Nothing sells online like fashion, darling
Fashion is leading the e-commerce boom.
Joo Hee-jin, a 30-year-old office worker in Nowon District, northern Seoul, opens the mobile app W Concept when she’s in the mood for shopping.
W Concept, a platform owned by Shinsegae’s SSG.com, offers all sorts of apparel from a variety of brands as well as reviews of products from other customers.
“Above all, it’s fun to browse the latest items since new brands appear on the app every so often,” said Joo.
In the distant past, people actually went to stores to buy clothes or cosmetics to see items and decide they suited them.
After the coronavirus shut down the shopping habit, online fashion platforms saw explosive growth. Young consumers discovered e-commerce platforms that specialized in fashion, unlike the general e-commerce platforms where a wide variety of things are available.
According to Statistics Korea Monday, the online fashion market expanded 19.1 percent in 2021 to 13.9 trillion won ($11.6 billion) in terms of transactions compared to the previous year.
E-commerce platforms specializing in fashion saw sharper growth than general ones such as Naver Shopping and Coupang, which grew 5.8 percent to 35.7 trillion won during the same period.
Frontrunner Musinsa had 2.3 trillion won in sales last year, a 90 percent increase compared to the previous year. ZigZag, a local online fashion marketplace owned by Kakao, surpassed the 1 trillion won mark, up 33 percent from 2020. Analysts project that Ably and Brandi will cross the 1 trillion won threshold this year as well.
SSG.com's W Concept has grown 30 to 40 percent every year since its launch in 2008 and is estimated by analysts to be doing some 300 billion won in transactions annually. Shinsegae International’s online cosmetics shopping mall S.I.Beauty app, which was launched in December, was downloaded nearly 320,000 times by the end of January.
Investors are eyeing the fast-expanding online fashion market.
Ably attracted a total investment of 67 billion won from investors including Shinhan Financial Group, while Queenit, a fashion platform targeting women in their 30s, 40s and 50s, got 36 billion won from Kakao Ventures, SoftBank Ventures Asia and other investors.
The big draw for consumers to online fashion sites is customized services tailored to their taste.
While the Covid-19 pandemic and the rise of a contact-free lifestyle boosted the e-commerce market in general, the younger generation became core customers for online shopping sites.
“Young consumers who value self-expression prefer specialized stores that provide customized shopping experience rather than general stores with a broad range of products,” said Lee Seung-jin, a spokesperson for Musinsa.
According to mobile app tracker WiseApp, fashion platforms such as Ably, Musinsa, Brandi and ZigZag were the most popular shopping apps for teenagers and people in their 20s.
Moreover, online shopping sites provide a community where users can share ideas and preferences.
“There is a growing trend to create a community based on personal interests instead of individual identities such as gender and age group,” said Jeon Mi-young, a researcher at the Consumer Trend Center in Seoul National University.
While the online market experienced steep growth, the overall fashion industry slowed during the pandemic. In a report published Dec. 1, consulting firm McKinsey found that the global fashion industry contracted by 27 to 30 percent on year in 2020 after the pandemic broke out. This year, however, the fashion business is forecast to rebound.
Backed by strong sales, online apparel retailers are expanding product lineups and user community features.
Musinsa’s StyleShare moved the shopping review section above the product introduction on its website and app, while Musinsa launched a investment program to promote budding fashion brands. ZigZag, ABly, and Brandi are aiming to enter the Japanese market.
“There is no Lotte style or Emart style, but Musinsa style is a thing,” said Jeon.
Jeon emphasized that companies better adjust to the "platform economy" if they want to survive.
“Companies should brace for a new economic model where platforms have bigger influence than brands, by developing customized services and reinforcing logistics capacities,” said Jeon.
BY LEE SO-AH [firstname.lastname@example.org]