Retail in Asia


Digital platforms for secondhand trading emerge as new retail unicorns in Korea

Asia leads digital retail market over Europe, US

Market valuation estimates of local digital platforms that promote individual trading of secondhand products have been on the rise with traditional retailers and even banks injecting large investments in hopes of them becoming the next Coupang and Market Kurly.

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Some market insiders say that the valuation of Danggeun Market, the nation’s biggest secondhand trading app by transaction volume, is estimated at 3 trillion won (US$2.5 billion). The figure, though based on mere estimation, surpasses the market cap of the retail giant Shinsegae Group, which currently logs 2.9 trillion won (US$ 2.44 billion).

The high valuation comes as the platform received 180 billion won (US$ 1.5 billion) in investment last year, an unprecedented record among the trading platforms, according to Danggeun Market official.

Threatened by the trading platform unicorns, retail giants are upping their game by investing in startups to create synergy with the group’s retail channels.

Bungaejangter, one of the nation’s top three secondhand trading startups, announced on 11th January that it has raised 82 billion won (US$ 68.9 million) in an investment round from Shinsegae, Shinhan and Mirae Asset.

Signite Partners, a venture capital unit under Shinsegae Group, said it views the startup as “a competitive edge” in secondhand trading for luxury goods, sneakers and golf wares. “We are looking forward to the collaboration between the platform and our retail channels,” it added without disclosing the size of the investment.

Shinsegae follows Shinhan Financial Group which invested 30 billion won (US$ 25 million) to Bungaejangter in September 2021. Based on the partnership, the group’s credit card unit Shinhan Card, is planning to launch a service targeting “MZ generation’” — those born between 1980 and 2000 — who are the key consumers in the secondhand trading market, according to the official.

Lotte Shopping, which controls Lotte Group’s retail business, invested 30 billion won (US$ 25 million) in Joonggo Nara, a trading platform retaining the largest number of users, in March 2021.

KB Kookmin Card, a credit card arm under a banking giant KB Financial Group, joined hands with Joonggo Nara to adopt a person-to-person credit card payment in the trading platform.

Experts say the secondhand trading market will enjoy explosive growth in the future as well.

“Many consumers are trying to catch up with the fast-changing trend in the retail market. Since they can’t purchase a new collection of luxury goods or shoes all the time, using a secondhand platform is a feasible option that fits their budget,” said Lee Eun-hee, a consumer science professor at Inha University.

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According to data from Hana Institute of Finance, the transaction volume of secondhand trading market in the country reached 20 trillion won  (US$ 16 billion) last year, surging fivefold compared to 2008.

(Source: Korean Herald)