(Yonhap Interview) Online luxury goods market has a new real-time database system

SEOUL, Oct. 06 (Yonhap) — In the luxury market, offline customer services are seen as important for lavish shoppers. European designer brands offer top notch and exquisite services to their loyal customers when they visit physical stores to build strong connections.

But the years-long COVID-19 pandemic has affected the vast but closed market, changing the consumption habits of these lavish shoppers and expanding the range of customers.

Online sales of luxury items in South Korea have increased due to growing consumer demand for online shopping, while young people, who have been shunned from expensive boutique goods, have become notable consumers.

Yoon Jae-seob, CEO of GUHADA, an online marketplace for fashion items including luxury brand clothes, bags and shoes, said his company is at the forefront of capitalizing on the changing consumer behavior and demographics through its advanced application programming interface (API) technology.

“By applying the API, we are simultaneously connecting inventory data from about 50 luxury brand suppliers to our database,” he said in an interview with Yonhap News Agency on Tuesday. “It helps our customers browse their full product list in real time and purchase one at a cheaper price.”

He said that GUHADA can provide 200,000 products from more than 1,000 luxury brands to customers at about 30-40% cheaper price than offline stores because it is in direct partnership with leading B2B wholesalers who handle many designer brands, such as Dior, Prada, Céline and Moncler.

The price includes all shipping and administrative costs, as well as tariffs, he added.

Thanks to the real-time database system, GUHADA introduces new arrivals as quickly as luxury brands launch them, while local department stores have to wait for some time to receive first shipments from abroad.

Large online shopping malls, such as Lotte On, an e-commerce platform operated by retail giant Lotte Group, are also GUHADA customers, as its real-time inventory database powered by API is also useful for Lotte activities.

The 38-year-old businessman said his company was the only one in South Korea capable of linking the inventory management systems of 50 stores at the same time.

“Many local platforms, like us, have their own API technologies, but they can communicate with one to 10 wholesalers,” he said. “You need to normalize the data you receive from multiple vendors.”

Yoon said his company places a high priority on building trust with customers, who may feel that buying luxury items online carries a range of risks, particularly with regard to their authenticity.

“We check whether the purchased item is fake or not right after it arrives in South Korea,” he said. “And we record all quality control and packaging procedures, and share the images with the customer.”

GUHADA started its business in 2019 and has become one of the largest online marketplaces for designer brands in South Korea with monthly revenue of 1 billion won ($708,000). It has over 300,000 members and averages 1.8 million monthly active users.

Yoon said his business was driven by the growing preference for foreign brands by the younger generation who no longer think of such valuable goods as the symbol of big players. Nearly 70% of its customers are between 20 and 30 years old.

“Young people want to express their unique fashion style with luxury products. They don’t want to display them ostentatiously,” he said. “They think it’s a matter of personal choice, and they buy items that are rarely chosen. We help them buy those goods at reasonable prices.”

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