Global Tax Free Acquires Stake in Onda Fashion... "Entering Luxury Distribution Business"

[Asia Economy Reporter Hyunseok Yoo] Global Tax Free, the No.1 tax refund company in Korea, announced on the 5th that it has acquired a 72% stake in Onda Fashion, an online luxury platform specialist company.

The transaction volume of the online luxury market has shown a remarkable increase, and online luxury purchases have become a global trend. According to global consulting firm Bain & Company, the global online luxury market size last year was $58 billion (approximately 64 trillion KRW). This accounted for 23% of the total luxury market, showing rapid growth compared to 12% the previous year.

Last year, the domestic online luxury purchase market grew to 1.5 trillion KRW, which is 10% of the total luxury market. Considering the global trend that has already surpassed 20%, the growth potential is very high.

In the past, the luxury market was classified as a high-involvement sector where more than half of buyers valued face-to-face relationships with sellers, showing slow digital transformation. However, nowadays, the luxury market is meeting IT to create new luxury market trends. The online luxury platform market proposes reasonable prices by reducing bubbles in the distribution stage. By thoroughly inspecting counterfeit products and strengthening after-sales service, the loyal customer base is expanding from young generations to middle-aged and older generations.

Onda Fashion provides one-stop management services for luxury distribution, including luxury sales, purchase and consignment sales of secondhand luxury goods, authentication of secondhand genuine products, and luxury repairs. CEO Myunghyun Kim of Onda Fashion has strengths in luxury purchasing based on networks built over more than 10 years as an MD at E-Land and overseas sourcing experience in Italy and other countries. Additionally, Onda Fashion currently operates its flagship store in Hapjeong and plans to open a Gangnam branch this year.

Jinwon Kang, CEO of GTF, said, “This investment decision is to enter the luxury distribution market through the acquisition of an online luxury platform, whose future growth potential is highlighted as contactless consumption is activated and the MZ generation emerges as a new consumption axis. At the same time, as part of business diversification, we plan to establish a related distribution division within the company and directly operate the business.” He added, “With the surge in revenge consumption suppressed by COVID-19 and investment demand recognizing luxury goods as assets, the online luxury platform market is expected to continue rapid growth in the future.” He continued, “We plan to continue new investments in promising growth companies and business diversification with a current funding capacity of 54 billion KRW.”