Are Korean Clothes Expensive? ... What Consumers Expect from Platform Competition [Chosun Price Records]

(27) Consumers Hesitant to Buy Clothes Amid 경기 Bulgeong
Fashion Platforms Engage in 'Price Competition'... Consumer Benefits Increase

Clothing and footwear prices in South Korea significantly exceed the average level of the Organisation for Economic Co-operation and Development (OECD), yet consumers are reluctant to open their wallets when buying clothes. As the economy struggles and high inflation persists, there is a tendency to reduce non-essential spending, prompting fashion platforms to fiercely compete with discounts to attract consumers.

The photo is not related to the specific content of the article. Photo by Musinsa

The top-selling item on the fashion platform Musinsa as of the 24th was a hoodie from Itzavibe. The price is 75,000 won. Itzavibe is a newly established brand created in 2021, gaining recognition as famous celebrities started wearing it. Although it is not a widely known major brand, its price is similar to Nike's SB Fleece Pullover Hoodie (79,000 won) and Adidas's Essential French Terry 3S Hoodie (79,000 won).

Clothes that sell well on other platforms also fall within a similar price range. On 29CM, the top-ranked top on the same day was a Low Classic T-shirt priced at 56,050 won, and for bottoms, Yurago's pants were 89,000 won.

University student Park Jeong-in (23) said, "Clothes prices these days are really expensive. I often buy through applications (apps), but since the list prices are high, I don't buy clothes unless there is a discount." She added, "Clothes sold in stores often exceed 100,000 won, which is unaffordable."

In fact, fashion prices in South Korea are higher than the OECD average. According to the Bank of Korea's report "Characteristics and Implications of Price Levels in South Korea," when indexing price levels by item based on the OECD country average (100), clothing and footwear scored 161, food products 156, and housing costs 123, indicating that clothing prices are particularly high. The report analyzed, "While South Korea's overall price level is about average among major advanced countries when considering income levels, many items have significantly higher or lower price levels compared to other countries," adding, "Costs for food, clothing, and housing are substantially higher than the OECD average."

Fashion Apps' 'Discount Competition'... Will It Be a Trigger for Consumers to Open Their Wallets?

The clothing and fashion industry is more sensitive to economic fluctuations than other sectors. During economic booms, more people buy new clothes, but during recessions, consumers hesitate to purchase clothes or shoes.

The fashion market's growth rate has been declining for three consecutive years. According to Trend Research's "Korean Fashion Industry Big Data Trend 2024," the fashion market growth rate was 8.2% in 2022, 2.8% in 2023, and is expected to be 2.3% in 2024. The report stated, "Due to the global economic downturn, rising prices, and weakened consumer sentiment, the downward trend will continue for two consecutive years," and diagnosed, "The domestic market stagnation persists, and especially the delay in interest rate cuts is rapidly weakening consumer sentiment."

On the 8th, citizens are exploring the store at the offline pop-up store of the Chinese fast fashion company 'SHEIN' that opened in Seongsu-dong, Seongdong-gu, Seoul. This is the first time SHEIN has opened a pop-up store in Korea. Photo by Yonhap News Agency

Fashion platforms, which have many consumer touchpoints, are actively engaging in discount competition to revitalize the atmosphere. They are expanding their tenant base to broaden the consumer base and issuing various discount coupons to encourage consumers to open their wallets.

The fashion platform Abley recently increased its number of tenants significantly. Currently, Abley hosts well-known domestic and international brands such as Giordano, Waretizen, Stonehenge, and Puma. In the trendy fashion segment mainly used by young people, online shopping malls like Blackup and Slowand are also tenants. Zigzag, a women's fashion platform operated by Kakao Style, also hosts various SPA brands such as SPAO, 8Seconds, Missha, and Shoopen, along with various online shops.

Discount competition among fashion platforms is also intense. Abley is running a Relay Big Sale, offering a 10,000 won discount to first-time buyers and providing up to 20% discounts by price range and tenant. Zigzag is holding a Summer Season Off sale, offering coupon packs that include coupons for up to 20% discounts. Musinsa held a SPA brand fair from the 8th to the 14th.

Moreover, as specialized Chinese fashion platforms are entering the Korean market in earnest, competition over clothing prices is becoming even fiercer. Currently, Shein is rapidly expanding its market share by emphasizing low prices. According to the app analytics platform Mobile, Shein's monthly active users (MAU) last month reached 660,000, a 10.3% increase from the previous month. The discount benefits are substantial: new members receive free shipping on all products and a 4,000 won discount, plus up to an additional 20% discount depending on the purchase amount.