According to Pulse, the secondhand retail market in South Korea has emerged as a lucrative business for the country’s traditional retail and tech giants as demand for used goods has been on the steady rise for luxury goods amid financial squeeze from inflation.
According to Hana Institute of Finance, the secondhand market in Korea grew fivefold from 4 trillion won (US$3.3 billion) in 2008 to 20 trillion won (US$16.78 billion) in 2020. The global secondhand retail market is also on the rising track with transactions expected to grow to US$77 billion in 2025 from US$27 billion in 2021.
Demand for secondhand goods is growing as high inflation pressure has caused concerns over the global economic growth. Traditional retail giants Lotte Shopping and Shinsegae have been upping investment in online secondhand platforms amid heated online reselling activity.
Lotte Shopping in March 2021 acquired a 93.9 percent stake in Joonggonara, Korea’s oldest used goods trading platform. Since the acquisition, Lotte has worked with the platform to create synergy. Joonggonara and Lotte Group’s venture capital Lotte Ventures jointly invested 6 billion won (US$5.03 million) in Wright Brothers, a local platform for bicycle reselling in February while in January, Joonggonara invested in Corner Market, a local resale marketplace for children’s clothing after collecting them. Lotte is also devising ways to utilise its offline infrastructure for Joonggonara’s secondhand transactions.
Another Korean retail giant Shinsegae Group invested 82 billion won (US$68.8 million) in Bungae Jangteo, a mobile marketplace, through its corporate venture capital Signite Partners.
“Shinsegae made the investment because of the platform’s strength in reselling luxury goods, sneakers, and golf equipment,” said an official from Shinsegae. The secondhand trading platform grew more than 30 percent from 1 trillion won (US$839 million) in 2019 to 1.7 trillion won (US$1.43 billion) in 2021.
Big-tech names have chosen to try their hand in directly selling secondhand products.
Naver’s sneaker resale platform, Kream, was spun off from its affiliate Snow in March 2021. Kream’s accumulated gross merchandise volume (GMV) rose to 800 billion won (US$670 million) with cumulative subscribers at 1.9 million in 21 months after its launch. KT’s affiliate KT Alpha operates a sneaker resell platform Reple and introduced a discount program based on KT membership in October. Lotte Himart operates a resell platform Hart Market on its online shopping mall.