[Asia Economy Reporter Lim Hye-seon] As the luxury market grows, transaction volumes on luxury platforms are also on the rise. This is a result of increased retaliatory consumption following the COVID-19 pandemic.
On the 25th, according to market research firm Euromonitor, the domestic luxury market is expected to exceed 15 trillion won this year. Last year, the domestic luxury market size was 14.9964 trillion won. Compared to 2015 (12.21 trillion won), it has grown by about 22%. With the continued preference for luxury goods and the expansion of the e-commerce market accelerated by COVID-19, transaction volumes on luxury platforms are rapidly increasing. Must It recently surpassed a cumulative transaction volume of 900 billion won. Trendevi, which partnered with Kim Hee-ae, announced that it achieved a transaction volume of 50 billion won in November alone, tripling compared to the same period last year. Riding on year-end shopping demand, Trendevi expects December transactions to exceed 80 billion won.
Balran, which features actress Kim Hye-soo as its model, achieved a transaction volume of 57.2 billion won last month, setting a record for the highest transaction volume for two consecutive months. Monthly active users (MAU) reached 6 million, and cumulative app installations surpassed 2 million.
Riding the luxury flex boom among the global MZ generation (Millennials + Generation Z), the luxury rental and resale market size is also expanding. Accordingly, the luxury e-commerce market is gradually segmenting into rental, resale, and other categories. ‘Luxury rental,’ which lowers the price burden through customized services targeting the MZ generation?who pursue rational consumption but are proactive in spending on themselves?is gaining attention. The MZ generation is not obsessed with owning luxury goods. They view luxury items not as collectibles to flaunt wealth but as unique means of self-expression. Prioritizing differentiated experiences over ownership, the MZ generation enjoys experiencing luxury goods through rental services before making immediate purchases. This is why more applicants in their 20s and 30s are increasingly turning to luxury rentals.
Additionally, the MZ generation, which values ‘cost-effectiveness’ and value consumption and frequently uses secondhand products, does not consider whether luxury goods are secondhand as a significant factor when consuming luxury items. Considering that the domestic secondhand market has rapidly grown from 5 trillion won to 20 trillion won, the secondhand luxury market is also presumed to be experiencing rapid growth.
As demand for luxury rentals and secondhand luxury goods increases, the variety of luxury rental and secondhand trading platform companies is also expanding. Globally, alongside the growth of over 40 luxury platform companies such as Farfetch, Mytheresa, Matchesfashion, and Net-a-Porter, rental and resale platforms like Rent the Runway and ThredUp are also experiencing high growth.
Luxury rental is considered a market with high entry barriers for business due to the difficulty of maintaining service quality, including quality control and counterfeit verification capabilities. Reborns is the only company in Korea that offers short-term and subscription services for luxury rentals.
Experts expect that as the purchasing power of the MZ generation gradually increases, the growth trend of the luxury rental and secondhand luxury markets will become even stronger next year.
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