Louis Vuitton+Nike Sneakers
Open Run Purchases, Resell at High Prices
Rapid Increase in Luxury Purchases by MZ Generation
Department Stores Also Enter Resell Market
[Asia Economy Reporters Seungyoon Song and Jinyoung Jeon] Park, a man in his 30s, accessed the website on the 19th to participate in an "online open run" to purchase the Air Force 1 model resulting from the collaboration between Louis Vuitton and Nike. This Louis Vuitton online store required customers to enter a waiting room on the website starting the day before, and at launch, people in the waiting room were randomly selected to move to the purchase page. After waiting 2 hours and 40 minutes in the waiting room, Park succeeded in purchasing the Louis Vuitton Air Force low-top priced at 3.51 million KRW. As soon as he receives the product, he plans to post it for sale on a resale platform. The expected resale price is 11 million KRW. Park said, "This lottery is no different from winning the lottery," adding, "My purpose is not to wear it but to resell it. Among those who applied around me, no one intends to wear it; only those who plan to sell if they win are quite common."
As interest in luxury goods among the MZ generation (Millennials + Generation Z) increases, reselling luxury items at prices higher than the purchase price has begun to solidify as a form of financial investment. Consumers have traditionally thought of luxury purchases as carefully selecting one product and maintaining it well to use for a long time. However, due to the recent recession and the stagnation of markets where assets like stocks can be formed, a trend has emerged among the MZ generation to view luxury goods as assets that can be liquidated by selling them when needed. Additionally, the MZ generation’s characteristic of valuing scarcity, such as limited quantities, has influenced this trend. Taking advantage of the fact that resale prices are typically two to three times higher than the release price, a new term "resell-tech (resell + financial tech)" has emerged, referring to people who enter every collaboration product lottery and resell the items if they win to earn a premium.
According to sneaker resale platform KREAM on the 26th, products with limited quantities and collaborations with luxury brands tend to have higher premiums. The "Air Force 1 Low by Virgil Abloh White Team Royal," a collaboration between Nike and Louis Vuitton, was released at 3.51 million KRW but resold for up to 30 million KRW. According to another resale platform, SoldOut, the "Air Jordan 1 Retro Low Travis Scott Sail and Reserock," a collaboration between American hip-hop artist Travis Scott and Air Jordan, was released at 189,000 KRW but has a resale price of 1.59 million KRW.
The distribution industry is also aligning efforts to capture these resell-tech consumers. According to the industry, KREAM and SoldOut have established additional authentication centers to secure market dominance. KREAM leased buildings for authentication centers consecutively in January and February this year, and SoldOut decided to use 40 billion KRW secured through a paid-in capital increase to expand its authentication centers.
Not only online platforms but also department stores have entered the resale market. Lotte Department Store opened the sneaker resale store Out of Stock, and Hyundai Department Store opened the sneaker resale store BGGZ Trap and the watch resale store Yongjeong Collection in collaboration with Bungaejangter at The Hyundai Seoul in Yeouido. Shinsegae also opened BGGZ Trap at Centerfield in Yeoksam. Department store resale shops are gaining popularity among people in their 20s and 30s, with steady purchases continuing. At Lotte Department Store’s Out of Stock, the Jordan 1 Retro Golf Cleat Chicago (release price 260,000 KRW) was traded at 2 million KRW. At The Hyundai’s BGGZ Trap, the Air Jordan 1 × Dior High OG (release price 2.4 million KRW), a collaboration between Air Jordan 1 and Dior, sold for 11 million KRW, with customers in their 20s and 30s accounting for more than 90% of buyers. In fact, people in their 20s and 30s have emerged as major luxury buyers at department stores. Last year, the MZ generation accounted for 45% of Lotte Department Store’s luxury sales and 48.7% at Hyundai Department Store.
An industry insider said, "As the MZ generation emerges as major buyers in the luxury market, it has become important for the distribution industry, including department stores, to quickly embrace their interests," adding, "Reflecting the MZ generation’s strong interest in limited editions, department stores have also started introducing resale stores."
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