Coupang embraces affordable fashion industry

Korea’s e-commerce giant Coupang is looking to tap into the country’s mid-range fashion market. 

The company is now reversing the industry standard -- adopted by Gmarket and 11STREET -- of focusing on higher-end fashion items. Prior to this latest push, Coupang was struggling to grow its fashion department despite boasting an unrivaled distribution network. 

HIRING FRENZY AND ASSISTANCE TO BRANDS 

In the latter half of this year, Coupang hired a few dozen employees to beef up its fashion department. The hiring spree covered a wide range of roles from merchandising directors and marketers to customer service professionals. 

Recently, it also replaced its head of the fashion department. An industry insider told The Korea Economic Daily that after hearing criticism about the lack of professional talent in the industry, Coupang decided on an aggressive hiring campaign. 

In addition to strengthening its human resources, Korea's largest online shopping platform is also reaching out to up-and-coming brands and existing crowd favorites that are popular elsewhere.

For fashion brands that join the Coupang Marketplace by the end of January 2022, the company will provide photography and video studios in Seoul's hot spots such as Mangwon-dong, Hapjeong-dong, and Dongdaemun free of charge. Last month, it also provided a free virtual lecture for online sellers. 

An employee with Coupang explained that even if one is an experienced seller offline, selling online poses new challenges. “We aim to create synergy effect by providing various assistance specialized for succeeding on the e-commerce platform,” the company explained.

BETTING ON COST-EFFECTIVENESS

Coupang’s strategy in the fashion industry can be explained with the phrase “cost-effectiveness.”

The country's largest online retailer views that Korea’s fashion industry is currently split between high-end and super affordable, without much middle ground. By attracting competitive brands and entrepreneurs who can utilize the 17 million active users of Coupang, the company hopes to capture the hearts and wallets of middle-class spenders. 

Samsung C&T Fashion’s BEANPOLE and LG Group’s casual fashion label HAZZYS are some of the most expensive brands on the platform. Most sellers on Coupang are mid-range brands that sell winter jackets and coats around the 100,000 won ($83.82) mark. 

These fashion items are delivered by 7 a.m. the next morning and eligible for no-questions-asked returns. This way, Coupang hopes that customers who are not keen to visit stores to begin with will not have to leave the house to go shopping. 

NEW STRATEGY SEEMS TO WORK

The number of small and new business owners who are on the e-commerce platform has jumped 154 percent year on year in June and sales increased 87 percent. 

Items listed by small businesses rose a whopping 810 percent in the same period. 

Coupang is confident that once smaller businesses can tap into the company’s massive distribution network, they will grow exponentially. 

In the past, Coupang rose to stardom with unprecedented delivery speed and no-questions-asked returns; and thus dominated even the fresh produce market in addition to industrial products.

The startup's earlier attempts to have a stronger presence in the fashion industry, such as starting an in-app fashion channel dubbed “C Avenue,” did not yield the desired results. During its IPO on the NYSE earlier this year, the company chose the clothing business as its next area for investment.

Write to Park Han-shin at phs@hankyung.com
Jee Abbey Lee edited this article.