Vertical Fashion Platforms for MZ Generation
Last month, we discovered that Naver Brand Store, an online direct store, has multiple benefits for both brands and customers. Today, we will learn more about local dominant platforms such as Naver, Kakao, Shinsegae, etc. expanding their business branches especially for the fashion area. This is interpreted as a strategy to secure a position by acquiring a fashion platform with high growth potential in the domestic e-commerce market, while also strengthening its capabilities as a platform operator by preoccupying future growth. Then let’s find out how the local giants are collaborating with vertical fashion platforms.
First off, in September 2020, “Brandi”, a fashion vertical platform, attracted 10 billion KRW worth of investment from Naver. And in August 2021, it attracted an additional 20 billion KRW in investment from Naver again. This investment was carried out following Naver’s exclusive investment of 10 billion KRW in 2020 and strategic partnership between the two companies in May in 2021, with Naver’s total investment of 30 billion KRW. With this investment, Brandi is pushing for Dongdaemun wholesale and retail merchants to enter the Japanese market with Naver. In addition, the Dongdaemun fulfillment center will be expanded by 4,000 pyeong and a new global logistics hub will be established. Founded in December 2014, Brandi operates the women’s fashion platform Brandi, the men’s fashion platform Hiver, and the fashion fulfillment service Helpi. Brandi is leading consumers’ huge interests by introducing a “one-day delivery” logistics innovation that allows them to receive ordered products in half a day for the first time in a fashion app.
In the meantime, Kakao split the style business division of Kakao Commerce, which operates “Kakao Style,” and merged with Croquis.com, which operates a vertical fashion platform “Zigzag” in April 2021. Launched on July 1st, “Kakao Style” has been incorporated as a Kakao subsidiary, and Zigzag will combine big data held in the fashion sector with Kakao’s technology and business capabilities to establish a competitive business base and discover new business opportunities. Zigzag, released by Croquis.com in 2015, is a mobile service that collects more than 4,000 online shopping malls and fashion brands, and has secured 2030 loyal customers and recorded 1 trillion KRW in transactions in 2021. Zigzag categorizes women’s shopping malls by popularity, age, and style so that users can easily find products that suit their style. In addition, it is characterized by providing personalized recommended products according to preferred shopping malls, products of interest, and purchase history using AI technology. In 2019, the company introduced “Z-Payment,” an integrated payment service that can put products from different shopping malls in one shopping basket and even proceed with payment, to enhance user convenience.
On the other hand, in May 2021, SSG.com acquired W Concept for 265 billion KRW. Although each platform is operated separately without combining them, it will collaborate by entering W Concept’s popular brand in SSG.com or selling SSG.com’s popular fashion and beauty brands in W Concept. The effect that SSG.com expects from acquiring W Concept is securing consumers of MZ generation. W Concept achieved 300 billion KRW in transactions as of 2020 by selling up-and-coming designer brand clothing, with major customers in their 20s and 30s. And just in March 2022, W Concept opened its first offline store at Shinsegae Department Store’s Gyeonggi branch. The reason why they chose Gyeonggi-do as the location is that the branch targets Pangyo and Bundang commercial districts where many young customers, who are the main customers of W Concept. The first offline store theme was set as “W Concept the Ground,” which means a space for communicating with customers.
In addition, there are many local platforms that are carrying out various fashion-related collaborations. Brandi, Zigzag, and W Concept are all fashion vertical platforms that are especially popular among the MZ generation, and they are all specialized in fashion categories. This means that customers are shopping for fashion online, so access to professionally handle fashion categories and easily purchase them has become important. As large local conglomerates such as Naver, Kakao, and Shinsegae place more emphasis on contact with the MZ generation, fashion-related businesses, events, and so on are expected to expand further in the future.
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