Luxury Platform in Crisis... Ballan's Hidden Card 'K-Luxury'

Start of Operation for Contemporary Fashion Specialty Hall 'K-Luxury' Within the Year
Securing Self-Sustainability Through Co-Growth with Domestic Brands

Amidst the continued sluggishness of luxury platforms due to recent consumer spending contraction, industry leader Ballan has launched a new business focusing on the overseas expansion of domestic contemporary brands to overcome the crisis. Ballan aims to secure self-sustainability through co-growth with excellent domestic brands and achieve sustainable growth.

According to industry sources on the 20th, Ballan will start operating the contemporary fashion specialty section ‘K-Luxury’ on the 22nd. K-Luxury is Ballan’s first-ever new business since its founding, aiming to discover outstanding domestic contemporary brands, open overseas sales channels, and support marketing and consulting, ultimately nurturing the participating brands into K-luxury brands.

Ballan plans to start with about 100 brands within this year and expand the number of brands in the K-Luxury section to over 1,000 by the second half of next year, increasing the transaction volume share to 20% of the total. Based on this, Ballan intends to raise the transaction volume, which was around 680 billion KRW last year, to about 1 trillion KRW by 2025.

Ballan’s move to seek new revenue streams by turning to new categories and overseas markets stems from the judgment that sustainable growth is limited by relying solely on existing overseas luxury sourcing. Luxury platforms experienced rapid growth during the COVID-19 pandemic when the duty-free industry slowed down. As the market size quickly expanded due to increased luxury demand driven by revenge spending, capital market investments, attracted by the industry’s growth potential, continued, leading to rapid expansion.

However, as the COVID-19 special demand disappeared and the high-interest rate trend intensified from the second half of last year, consumer sentiment weakened, causing luxury demand to decline rapidly, and the number of platform users was halved. According to Mobile Index, a mobile usage indicator analysis solution, as of the end of the third quarter this year, the number of users of the three major luxury platforms sharply decreased compared to the same period last year. Ballan’s users dropped from 5.72 million to 2.92 million, Trenbe from 4.98 million to 2.6 million, and Mustit from 2.61 million to 1.42 million.

As user numbers declined and growth stalled, luxury platforms have recently sought survival by partnering with e-commerce. Mustit opened a ‘Mustit Specialty Section’ within the CJ OnStyle application in May, marking the first move, and in October, Trenbe became a seller in 11st’s luxury specialty section ‘Ualuxe.’ Catch Fashion also started selling luxury goods on Gmarket and Auction.

While luxury platforms are choosing partnerships with e-commerce one after another, Ballan’s decision to pursue an independent path with a new business is based on the belief that domestic brands have sufficient potential. With the recent influence of Hallyu and growing global attention on Korea in the fashion world, and with brands like Wooyoungmi and Junji steadily achieving results in the global market, Ballan believes that by leveraging its luxury platform operational know-how to select and nurture domestic brands, the business potential is substantial.

Ballan is currently considering various expansion strategies, including directly launching a global application and partnerships with local platforms. The target market is set as the entire Asia-Pacific region. In particular, Japan, China, and Southeast Asian markets are the primary targets, with the company evaluating that these markets have relatively low e-commerce activation levels compared to their potential, allowing for significant first-mover advantages.

A Ballan representative explained, “Since last year, competition for entry of so-called ‘new luxury’ overseas contemporary brands centered around department stores has been fierce, and as demand for contemporary brands is increasing among the main consumer group, the MZ generation, instead of traditional luxury brands, we judged that growth potential is sufficient.” He added, “We see that this year’s transaction volume gap with the second-ranked company has widened to about 2 to 3 times,” and “Next year, we plan to further expand market share by using the new business as momentum.”