Until a couple of years ago, second-hand clothing did not receive the global recognition it does today. This section of clothing used to be limited to thrift shops or flea markets, and high-end brands were hard to find. However, millennials today are turning the used goods market upside down. Not only have millennials been buying and selling more second-hand products, but they are also bringing pre-owned luxury items into the market, creating a whole new culture of shopping for second-hand luxury goods.
According to the global management consulting firm McKinsey, the international luxury goods market is around 350 trillion won, and is expected to increase by three percent for the next seven years. Also, with the development of online shopping, affordable second-hand goods are becoming increasingly accessible. This has allowed pre-owned luxury goods retailing companies to make way for millennials to further expand this domain. Another prestigious management consulting firm, Bain & Company, analyzed that the global second-hand luxury goods market will grow steadily each year by 15 percent until 2025.
These changes can be attributed to the buzzword flex. When used as slang, it means “to show off.” Fitch Solutions, a firm delivering market data to the global financial community, predicted that out of all South Korean millennials who consume and “flex,” nearly 60 percent would splurge on high priced luxury items such as clothes. Furthermore, the term HYOLO is ever more resonating with millennials. It is a coined term which combined nahollo, which means alone in Korean, with YOLO, the acronym for “you only live once.” The term refers to the millennial characteristic which places the greatest importance on one’s own happiness.
Already, companies like The Real Real and Rebag are flourishing in America as preowned luxury goods shops. Korea secondhand luxury item shops are also being introduced to the market.
Koodon is one of many Korean secondhand luxury goods companies. It officially launched in August last year. Its sales started with 40 million won in the first month, but in January 2020, it increased by 20 times to reach 800 million won. According to the CEO of Koodon, KP Rhee, more than 80 percent of Koodon’s customers are millennials.
Rhee explained the reason behind millennials’ interest in second-hand luxury goods.
“Millennials view luxury goods not as a permanent possession, but as a fashion item to consume,” Rhee said. “Therefore, they buy and sell luxury goods much more than the previous ‘baby boomers’ generation. This has increased the luxury goods market itself, leading to a gradual increase in the secondhand luxury goods sector as well.”
He stated that though this sector has made an enormous growth, it has yet to improve. Most customers do not have professional knowledge about the luxury items they want to buy. Therefore, if they buy the product directly from the seller, it also exposes them to buy frauds or overpriced goods.
Koodon solved this problem by hiring professionals to not only verify genuine products, but to analyze and suggest the appropriate prices for them. Furthermore, Koodon engages in all the necessary transactions to sell the product, from collecting it at the seller’s home to registering and selling the product online. Rhee believes that it is these special features which allowed the vast increase in their company sales.
The CEO also shared his own experiences about purchasing second-hand luxury goods. Rhee spent his college years in America, where he worked at his university’s Accelerator Program, which was designed to help student start-ups. He talked about how he saved his salary and to buy a pre-owned luxury watches. He was glad he could buy a nice luxury product for a more affordable price and wanted to share his experience by developing Koodon.
“At the time, the focus was on buying a great luxury-product for a cheaper price, rather than buying it second-hand.” Lee said. He speaks for all millennials who buy preowned luxury goods.