South Koreans are maintaining their love for premium fashion items with purchases of used luxury items and "quiet luxury" goods amid a slowdown in Asia’s fourth-largest economy. This comes amid a tumble in the local resale market as customers, notably the younger millennials and Gen Zers, tightened their belts.
Gugus Co., a local used luxury goods trading platform, said on Monday its transaction volume during the April-June period rose 22% on-year to 44.7 billion won ($35.4 million), a record for a single quarter.
Trenbe Inc., a leading Korean premium fashion e-commerce platform, said sales of secondhand goods took up 22% of its total revenue in June, double the 11% share in June of last year.
“Value for money is becoming a major trend in the luxury market,” said a retail industry source in Seoul.
Meanwhile, the wealthy, immune to the economic slowdown, are looking for quiet luxury brands that are not well-known by the public. These emerging designer labels take a unique approach to minimalistic and modern design.
The rich's wish list includes Delvaux, Loro Piana, Valextra and Berluti as the wealthy opt for low-profile opulence without prominent logos, industry sources said.
“Luxury goods became so popular that Chanel’s Medium Classic bag could be seen every five seconds at weddings,” said one fashion industry source, referring to the French fashion house’s popular handbag. “So the super-rich are now looking for high-end designer labels known to only a few.”
SHRINKING RESALE MARKET
Meanwhile, the South Korean luxury resale market tumbled as the economic slowdown forced customers, particularly the younger millennials and Gen Zers, to tighten their belts.
Korea's secondary market for luxury goods, where customers purchase new premium items with price tags intact and and in their original packaging, enjoyed a boom in 2020-2022 with people willing to pay premiums of thousands of dollars for designer products.
It occurred as some high-end fashion houses, such as Hermes International S.A., Louis Vuitton Malletier and Chanel Inc. unfurled Korea-specific policies to not sell popular items to customers without previous purchase records in the face of limited supplies, according to retail industry sources in Seoul.
“Young rookie luxury goods customers were familiar with the resale market as it was so uncomfortable for them to buy at official stores,” said one of the sources.
The boom burst this year, however, as a slowing domestic economy drove those young customers out of the market altogether.
DISCOUNTS
Kream, the resale platform of South Korea’s online giant Naver Corp., said it logged only 58 transactions in premium items in the first half of the year — about one-third the number of a year earlier.
The value of luxury goods in the resale market also dropped. Chanel’s signature Medium Classic Double Flap Bag with silver hardware sells for as low as 12 million won in the local resale market, or 17% less than the official Korea price of 14.5 million won. The same handbag had traded with premiums in the thousands of dollars last year.
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