Unloading those $10,000 used sneakers has never been easier

Industry

Published: 23 Aug. 2022, 17:08 Updated: 23 Aug. 2022, 18:33

Unloading those $10,000 used sneakers has never been easier

SSG.com will introduce used luxury goods on its online shopping mall in patnership with Bungaejangter. [SGG.COM]

The online luxury market is starting to pay attention to used items. Resale of luxury goods is increasing and related services are growing and becoming more sophisticated.

Many more options are available for those who want to buy $100,000 watches or $10,000 sneakers.

SSG.com announced on Monday that it will introduce used luxury goods on its online shopping mall in partnership with Bungaejangter, Korea's largest secondhand trading app. From Aug. 29, used luxury goods sold by "BGZT Collection," Bungaejangter's premium concept store, will sell products on SSG.com.

Secondhand luxury goods purchased directly by Bungaejangter will be sold through this collaboration, including 200-million-won ($148,960) Rolex watches and Hermes Birkin bags that cost 50 million won. Around 200 kinds of luxury goods will be available, and all products will go through strict certification by Bungaejangter.

SSG.com opened a luxury goods department last month and created a used luxury goods section that collects products from major used luxury partners. SSG.com's second-hand luxury sales increased by 220 percent in July compared to the same period last year.

The online luxury retail industry is divided into luxury goods e-commerce sites and second-hand luxury goods e-commerce sites. The first category is led by three Mustit, Balaan and Trenbe, while Naver Kream, StockX and Bungaejangter dominate the second category. As Vestiaire Collective, a Paris-based secondhand luxury e-commerce site, opened in Korea last month, the used luxury market is getting bigger.

Vestiaire Collective, a Paris-based secondhand luxury e-commerce site, opened in Korea in July. [VESTIAIRE COLLECTIVE]

Luxury sites that have attracted customers with the strategy of relieving them of the inconvenience of offline shopping, such as queuing in front of department stores to purchase luxury goods, are experiencing a slump recently. Earlier this year, a t-shirt product from Musinsa Boutique was found to be a fake. Balaan was accused of selling counterfeit sneakers.

A total of 1,151 consumer complaints related to the major luxury e-commerce sites have been filed over the past three years, with numbers doubling every year, according to the Korea Consumer Agency. Complaints mainly concerned large return fees or subscription traps, where it was impossible to unsubscribe.

The number of users of major luxury sites is on the decline. The number of monthly active users of Mustit, Balaan and Trenbe decreased between 10 to 40 percent in June, according to data from Mobile Index, an app analystics service.

While they are facing challengers, resale platforms that handle second-hand products are growing rapidly by adopting a thorough inspection system.

Kream started by specializing in sneakers in 2020, but has expanded its scope to other goods, such as bags and wallets, since the end of last year. In terms of items handled, Kream is a now almost a full online luxury mall. The transaction amount of Kream in the first half of this year was 720 billion won, significantly exceeding Balaan's 381 billion won.

Luxury platforms are entering the resale market to expand their services. Trenbe, which opened the used luxury consignment service Trenbre Resale in 2020, recently opened the Premium Genuine Resell, which allows individuals to buy and sell luxury good directly with each other.

Resale companies have the potential to evolve into gathering places for people who buy and sell luxury goods.

"These customers can be both sellers and buyers of luxury goods," said Maximilian Bittner, CEO of Vestiaire Collective.

Resale platforms are brokering transactions between individuals, so they have put a lot of effort into the inspection system for products. They are therefore more competitive in terms of reliability, which is the core value of online luxury trading.

They have also strengthened the handling of products that are difficult to obtain in the market, such as brands like Chanel, Hermes and Rolex, compared to existing luxury platforms that deal with commonly popular luxury goods.

"As the online luxury market grows, competition is intensifying as large companies such as SSG.com and Lotte On are also entering the race," said an industry insider.

BY YOO JI-YOEN [lim.jeongwon@joongang.co.kr]