Secondhand market growth gains pace

This captured image shows two gift boxes for the Lunar New Year holiday for sale on Danggeun Market, an online flea market platform. Korea Times file

The secondhand market in Korea is growing rapidly, as persistent inflation pushes consumers with less purchasing power to opt for used or like-new items.

The resale boom follows advances in e-commerce technology and the evolution of online flea markets that make it possible for tech-savvy, younger people who value the experience of buying and trying a variety of products, including luxury brands, to do so, at affordable prices.

According to the Korea Internet & Security Agency, the secondhand market nationwide was worth 24 trillion won ($17.35 billion) in 2021, a six-fold increase from 2008 when it was valued at 4 trillion won.

Tasked with cybersecurity and analysis of relevant data, the government-affiliated agency projects that the market will reach 43 trillion won by 2025.

In a separate finding, KB Securities estimated the market to grow strongly within the range of 15 percent to 20 percent annually over the next few years.

 

Asked about the reason behind the steep pace of growth, Voice for Consumers, a Seoul-based civic group, analyzed that it partly owes to years of high inflation in the post-pandemic era.

“It is not just happening in Korea. In fact, it is a global phenomenon after high prices made more people find ways to spend less,” the group said.

The group cited a study from the Hana Institute of Finance, a financial think tank, which predicted the global secondhand market will be worth $77 billion by 2025, up from $27 billion in 2021.

The group additionally cited ThredUP, an American online thrift store that sells high-quality secondhand clothes.

The U.S. secondhand clothes market was worth $43 billion in 2023 and is forecast to expand 11 percent on average every year through 2028.

In addition to inflation, rapidly evolving online flea markets are attributable to the popularity of the re-commerce sector.

In Korea, online flea markets began in the form of small internet communities in the early 2000s and have since evolved into a broad range of smartphone app-based platforms.

KB Securities pointed out the re-commerce sector was valued at 20 trillion won in 2020, with 7.8 trillion won or 39 percent of all transactions coming from the four major online flea market platforms — Danggeun Market, Bungaejangter, Joonggonara and HelloMarket.

“The popularity will continue in the digital era, and especially Millennials and Generation Z make up a pool of loyal customers,” said Lee Young-ae, a consumer science professor at Incheon National University.

For instance, 75 percent of Bungaejangter users were Millennials and Gen Zers, according to KB Securities.

“These young generations are different from older generations in their spending patterns, in a way that they value customer experience over possession of goods,” the professor said. “In that regard, online flea markets serve as their playground to try and re-sell the products.”