eBay Korea Adapts Quickly to Changing Market Demands in Fashion

By: eBay Inc. Staff

Employees in the eBay Korea fashion category work with vendors to ensure fresh offerings at competitive prices.

South Korea’s history as a fashion retailer is very different from other developed countries. Before 1998, when Auction became the first online site of its kind (followed by the arrival of Gmarket in 2002), the Korean fashion scene was almost entirely dominated by non-brand stores.

Part of the reason for the absence of big brand names, says eBay Korea Head of Auction Sales and Marketing Ki-Bum Kim, was the country’s historic focus on high-quality fabrics. Most shoppers were content to buy excellent, no-label clothing, offline.”

“There were a limited number of local brands and even fewer imported brands back then,” says Ki-Bum. “Many offline sellers would merchandise according to their intuition or simply imitate others.”

That all changed during the Internet shopping revolution. After the arrival of Auction and Gmarket, Korean offline fashion sellers flocked to sell online.

“Before the integration between Gmarket and Auction, competition was fierce,” recalls Ki-Bum. “Fashion category managers had to monitor promotions, forecast trends daily and update listings, sometimes in a matter of minutes. When certain categories were selling well, they made sure to showcase the right items on the home page at competitive prices, to maximize exposure.”

In the evolving marketplace, however, other issues began to surface. The vast increase in sellers made trust a growing issue. Imitation and copyright became topics of dispute between sellers, buyers and eBay Korea. To help resolve these matters, Auction put VeRO (the Verified Rights Owner Program) into effect while Gmarket ran the BPP (Brand Protection Program).

At the same time, there was a growing demand for product variety, ranging from high-quality brands to ‘fast-fashion’ items, superseding the demand for competitive pricing.

“Customers wanted fast-trend, Gap-like T-shirts with coordinating Michel Kors handbags,” explains Ki-Bum. “To create growth momentum, we began to focus on differentiating non-brands, attracting exclusive brand names, developing a ‘closed-market’ model and improving our search functions.”

In 2009, eBay Korea launched Brand+, a site on which international and local brand sellers could offer products directly to the market. Instead of hunting for reliable sellers, the five million members in Auction and Gmarket could now easily find major brands in one place, including big names like Nike, Polo and Adidas.

Despite the growing demand for famous brand labels, ‘fashionable generics’ remained a vital market. That’s why eBay Korea formed SOHO#, a site for large, non-big-brand sellers. Customers could easily navigate within this closed market and get great values at the same time, says Ki-Bum.

The ‘Style Finder’ function enables users to search for and sort items by attributes such as fabric, style and color. ‘Look Book’ – a fashion magazine within SOHO# – provides a destination where customers can check out new style trends from SOHO sellers.

At the same time, the early 2011 opening of Lotte (think Macy’s) on Gmarket and Auction sites introduced even more exclusive brands from the country’s popular high-end department store.

Since its launch, Lotte sales have been growing. Now, Japan’s huge online mall ZoZo is about to follow suit. “We’ve become the first in Korea to provide a store-in-store concept for a Japanese online shop,” says Ki-Bum.

Ki-Bum sees a strong future for eBay Korea, based on their proven ability to adapt and act quickly.

“People working in the eBay Korea fashion category make sure offerings are fresh and interesting and that our prices are competitive. This will always be our strength: Offline stores can’t change their store racks every minute. We can, thanks to the expertise of our people working behind the scenes.”

This, says Ki-Bum, will help eBay Korea maintain its competitive edge in the future.