[Herald Interview] “Millennials’ preference for experiences is fueling the luxury fashion market”

Ha Dong-gu, CEO of Reebonz, poses for photos during an interview with The Korea Herald at the company’s headquarters in eastern Seoul. (Im Se-jun/The Korea Herald)

South Korea is rising up the ranks of the luxury market agenda, propelled by pent-up consumer desire to buy high-end fashion items as pandemic lockdowns are lifted and the country takes steps to return to normal.

While many choose to buy high-end fashion items both offline and online, some prefer to rent them at much cheaper prices. To meet this demand, an increasing number of local businesses have signed up for rental services.

“We have built a luxury ecosystem to provide services, from the purchase and sale of new and used premium products to the rental of luxury fashion items by subscription, making luxury accessible”, Ha Dong-gu, CEO of Reebonz, said in a recent interview with the Korea Herald at the company’s headquarters in eastern Seoul.

Ha created Reebonz, formerly known as Reebonz Korea, in July 2012 by comparing American online high-end clothing rental company Rent the Runway. After buying a 100% stake in Reebonz from its Singapore headquarters in 2019, the company changed its name and became a leader in the Korean market for luxury e-commerce rental services.

Luxury fashion items are stocked at Reebonz's operations center located in Songpa-gu, southeast of Seoul.  (Reebonz)

Luxury fashion items are stocked at Reebonz’s operations center located in Songpa-gu, southeast of Seoul. (Reebonz)

More than 2 million new and used premium products are available for sale, and more than 8,000 items are ready to rent, he said. Hermès, Louis Vuitton and Chanel are the most popular global brands among Reebonz customers.

Reebonz is best known to women in their 30s and 40s, but after launching the rental service in December 2016, the age range of its main customers dropped to 25-35, Ha said. The number of rental service users is growing the fastest among the company’s three main businesses, he added.

“It’s supported by the consumption behaviors of Korean millennials (those born between 1981 and 1996) who are more open to spending money on experiences than older generations,” he said. “Since they are pessimistic about their prospects of becoming homeowners with their income due to soaring property prices, they prefer to ‘invest’ money in experiences by owning or borrowing luxury goods.”

Korea is the world’s seventh-largest luxury market, with the value rising 4.6 percent year-on-year to around $14.2 billion in December last year, according to the latest data released by Euromonitor International.

Ha Dong-gu, CEO of Reebonz, poses for photos during an interview with The Korea Herald at the company’s headquarters in eastern Seoul. (Im Se-jun/The Korea Herald)

Ha predicted that millennials’ preference for experiences will likely continue to fuel the growth of the local luxury fashion market.

But as prices for global luxury goods are expected to rise with growing demand, Ha believes high-end fashion rental services and second-hand sales are likely to accelerate their growth. This idea led to the launch of the 79,000 won ($62.30) monthly rental subscription service.

“The luxury we seek isn’t about extravagance. It’s about making customers’ lives more valuable beyond the three basic necessities of food, clothing, and shelter. We believe that everyone craves luxury,” Ha said. “We aim to provide a better ‘experience’ for our customers as part of our luxury ecosystem.”

By Jie Ye-eun ([email protected])

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