Скачать или смотреть MZ Generation flexing muscles behind booming luxury brand market

Personal luxury goods market continues to expand despite pandemic By Lee Gyu-lee While COVID-19 has dealt a blow to almost every industry worldwide, bringing chaos and economic recession, the personal luxury goods market in Korea has shown an unusual pattern. Unfazed by the pandemic, it has set itself apart from the general economic slump with steady growth. According to the global research firm, Euromonitor International, the country's personal luxury goods market has managed to weather the pandemic-caused economic crisis, with its value reaching $12.5 billion in 2020, showing little change from the previous year's $12.52 billion. The figure was $12.24 billion in 2018. This situation is in stark contrast to the fact that the global personal luxury goods market value suffered a 23-percent drop during the same period ― from $318.6 billion in 2019 to $246 billion in 2020 ― which saw Korea taking up an even greater portion of the market. Buoyed by these booming luxury goods sales, Korea's online channels for luxury brand shopping have also seen a boost, with new platforms emerging and existing ones stepping up their game in the heated competition. Online sales made up about 10.6 percent of the luxury market, compared to 8.6 percent in 2016. In 2020, the market for online luxury goods shopping had an 11-percent jump from the previous year, estimated at 1.6 trillion won ($1.34 billion). Suh Yong-gu, a professor of management at Sookmyung Women's University, explained that the luxury goods market has been expanding, owing to the so-called MZ Generation ― a newly coined term referring to both Millennials (born 1981-1995) and Generation Z (born 1996-2005) ― consumers. "The majority of consumers for the luxury goods market are the MZ Generation. Their purchasing power, finance and income might not be sufficient to conveniently afford these goods. But compared to the older generation, they favor luxury goods and are more inclined to make purchases," the professor told The Korea Times. "The reasons behind it include the splurging, the flex consumption trend, and the revenge spending pattern due to frustrations from the pandemic, such as not being able to travel abroad," he explained. "Flex" is a slang term coming from hip-hop music, meaning to "show off," and "flex consumption" refers to buying expensive goods to flaunt an extravagant lifestyle. To grab a piece of the burgeoning market, conglomerates are quickly jumping in to secure their own channels for online luxury goods shopping. Lotte Group's subsidiary, Lotte Duty Free, opened its first online luxury shopping platform, "Sogong 1st Ave," earlier this month. The online duty-free service became home to about 30 high-end luxury and designer brands, such as Valentino, Moncler, Alexander McQueen and Fendi. Tech giants Naver and Kakao have been adding more diverse luxury brand goods on their e-commerce platforms. Naver launched a new category dedicated to luxury goods on its Naver Shopping platform this July, and Kakao has been opening up official brand stores, such as Tiffany & Co. and Mulberry, within its e-commerce service. Leading menswear online shopping platform Musinsa rolled out an in-app boutique in June to enable its users to shop specifically for luxury brands, curated by the service. Professor Suh noted that such diversified channels to supplying luxury goods have triggered a cycle of increased supply and demand. "In the past, for most cases, people had to go to a department store and, oftentimes, wait in a line to purchase luxury goods," he said. "But as supply channels have diversified, the supply has contributed to a further increase in demand, which eventually leads to an even greater expansion of its supply chain." Amid the growing competition, the existing luxury and designer brand online platforms, such as Mustit, Trenbe, Balaan and Catch Fashion, are forging a way to secure their slice of the business, using big-name stars as brand models. Mustit started a marketing campaign with the Netflix series "Kingdom" star, Ju Ji-hoon, in August. The company revealed that it has earned 32 billion won ($27 million) during the month after the campaign's launch, and the number of newly registered users increased by 66 percent, compared to the previous month. The platform, which was founded in 2011, saw a huge jump in its transactions over the past two years, from 95 billion won in 2018, to 150 billion won in 2019, then to 250 billion won ($210.7 million) in 2020, according to the company. Catch Fashion has seen a 183 percent spike in new users during the month following its featuring of actor Jo In-sung in its brand campaign in September. Trenbe, advertised by actress Kim Hee-ae, also saw an increase in monthly transactions by about 4.2 billion won compared to the previous month. A frequent online buyer of luxury goods, surnamed Kim, remarked that the platfo