Online Retailers Expand Luxury Sections to Boost Sales and Image

South Korean online commerce platforms are increasingly focusing on luxury and premium brands to drive profitability and enhance their market image. Faced with slowing growth and intense competition in low-price goods, companies are strategically expanding dedicated sections for high-end fashion, beauty, and home furnishings.

Naver is broadening its 'High-end' service, initially focused on beauty, to include fashion and furniture/living brands. Since launching Chanel Beauty and Burberry Beauty, the platform has seen significant growth, with a 60% increase in participating brands and a 73% rise in transaction volume for 'High-end' services in the first half of the year. High-end furniture brands alone saw a fivefold increase in transactions.

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Online platforms and luxury brands will continue to increase collaboration as platforms aim to provide brand experiences similar to offline stores and luxury brands seek to secure new customers.

SSG.com has been actively attracting official global luxury brand stores, launching Prada in 2024 and Miu Miu in June. The platform plans to offer exclusive online products and aims to replicate the in-store shopping experience. Similarly, fashion platform Musinsa has expanded its 'Musinsa Boutique' for luxury and designer brands, growing from 60 to approximately 280 brands since its 2021 launch.

CJ Onstyle is leveraging its 'Lux Beauty' section, featuring around 70 premium beauty brands, to increase the average order value for its mobile users. The 'Lux Beauty' section saw a 43% year-on-year sales increase from January to May, with an average order value of 240,000 won last year. This strategic shift towards luxury aims not only to boost sales but also to build platform credibility and attract new customer segments.

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The official entry of luxury brands helps increase sales of high-priced goods and also enhances the credibility and image of the entire platform.