"Jay Y Lee Wears It Too": Word-of-Mouth Drives Sales Boom... Overseas Brands Rush for Direct Entry into Korea

Jay Y Lee's Parka Drives Arc'teryx Boom
Word-of-mouth and social media fuel soaring sales among young consumers

While the domestic fashion industry is facing a double challenge from the economic downturn and abnormal weather conditions, overseas sports brands are instead entering the Korean market directly. This is due to Korean consumers emerging as an active group of early adopters for new brands, as well as their influence in leading global fashion trends through social media and other channels.

In 2019, Samsung Electronics Chairman Jay Y Lee made headlines by wearing a red padded "Firebee AR Parka" on a train to Busan. Arc'teryx, Asia Economy DB

According to the fashion industry on August 27, Canadian premium outdoor brand Arc'teryx signed a contract on August 20 to acquire the Arc'teryx business from Nelson Sports, which has been responsible for exclusive distribution in Korea. Through this contract, Arc'teryx plans to directly enter the Korean market and actively develop its Direct-to-Consumer (DTC) business, which involves selling directly to consumers without going through intermediate distribution channels.

Jay Y Lee's Padded Jacket Fame... Word-of-Mouth Drives Sales Surge

Arc'teryx, often referred to as the "Hermes of the outdoor industry," is a high-end brand that has gained popularity especially among younger generations. In Korea, the brand drew major attention in 2019 when Samsung Electronics Chairman Jay Y Lee was spotted wearing a red padded "Firebee AR Parka" on a train to Busan, which became widely known as the "Jay Y Lee padded jacket." At the time, the parka sold out rapidly, causing a surge in domestic sales.

As a result, Nelson Sports, which has been distributing Arc'teryx in Korea, saw its sales increase from 50.1 billion won in 2021 to 161.1 billion won last year, nearly tripling in four years. During the same period, operating profit rose from 11.3 billion won to 40.2 billion won, almost a fourfold increase. The Arc'teryx business accounts for about 80% of Nelson Sports' total sales. An Arc'teryx representative explained, "Korea is a market with an active outdoor community and strong demand for Arc'teryx products, so the transition to DTC is a natural strategic choice."

Previously, global sports brand New Balance also announced a direct entry into the Korean market. Since 2008, E-Land World has been responsible for New Balance's distribution in Korea. Initially, New Balance's annual sales in Korea were around 25 billion won, but last year, domestic sales surpassed 1 trillion won, prompting the brand's headquarters to decide to establish a Korean subsidiary.

However, since E-Land will continue to operate the New Balance brand until 2026, New Balance headquarters is expected to enter the Korean market directly starting in 2027. E-Land World's cumulative sales for the first half of this year have shown growth for five consecutive years, with sales in the sports segment-driven by New Balance and New Balance Kids-increasing by approximately 13% and 20%, respectively, compared to the previous year, contributing to strong overall performance.

Japanese premium outdoor brand Goldwin will also open its first directly managed standalone store in Korea next month at Shinsegae Department Store Gangnam. Goldwin entered the Korean market in 1992 through a joint venture with Youngone Trading Holdings, establishing Goldwin Korea (now Youngone Outdoor). Last July, Goldwin decided to terminate its license agreement with Youngone Outdoor as of January 1 this year. Goldwin also tested the direct-entry effect through a pop-up store in Seongsu-dong in November last year.

Yonhap News

Among global brands, Korean consumers are classified as a highly active demand group.They tend to acquire information through various social networking services (SNS) and online communities at a relatively faster pace than overseas consumers, and they quickly spread related products as trends. Offline spaces such as Seongsu-dong or Apgujeong Dosan-daero, where the latest fashion and beauty trends can be experienced, are also an advantage. A fashion industry insider explained, "From the perspective of overseas headquarters, Korea is not just a sales market but serves as a strategic outpost for global strategy," adding, "The younger generation's ability to drive consumption and spread trends is particularly strong."