In-store sales from foreign tourists in Seoul's main shopping hubs boom
Musinsa, South Korea’s largest online fashion platform, has long been a behind-the-scenes tastemaker, setting the tone of the country's youth fashion scene.
Yet, what has given the company sharper definition over the years can be chalked up to its private label, Musinsa Standard.
Now squaring off against global fast-fashion giants on its own home turf in Korea, Musinsa Standard has asserted itself as a force to be reckoned with. The brand outfitted Team Korea in sleek cerulean blue ceremonial uniforms at the 2024 Paris Olympics.
From online-only to street
Brought to life as Musinsa’s private label in 2017, Musinsa Standard began as an online-based brand delivering affordable basics.
In 2021, Musinsa Standard shed its online-only identity, establishing its first brick-and-mortar store in Seoul’s youth-centric district of Hongdae.
From there, Musinsa Standard rode a wave of store openings in three of Seoul’s districts for shopping, including Myeong-dong, Seongsu-dong and Hannam-dong. The pace didn’t let up, with 14 more stores added just last year.
As of March, the brand operates 23 stores nationwide, extending beyond Seoul to Gyeonggi Province, as well as Busan and Daegu. It kicked off the year with a fresh launch in Ulsan in February, with the momentum continuing into the capital through three additional openings in March.
"With a balance of reasonable pricing and high-quality products, Musinsa Standard will continue its offline expansion, sharpening brand recognition through strategic footholds in key commercial districts,” a Musinsa official said.
The brand’s reach extends beyond its own stores, with essentials now available at GS25 convenience stores nationwide.
With just 23 stores to its name, Musinsa Standard is still dwarfed by global heavyweights like Uniqlo, which ran 132 locations in Korea as of December.
But sheer numbers don’t tell the whole story, in particular among younger generations.
In a survey conducted last October by Open Survey, which polled 800 Korean nationals aged 19 to 29 about which fast-fashion chains they had ever purchased from, Musinsa Standard topped the list at 48.1 percent, ahead of global chains like Uniqlo (42 percent) and Zara (36 percent).
Its swift trend-chasing agility, combined with affordability and the platform’s extensive reach, has helped catapult the brand’s popularity to new heights, according to industry insiders.
In-store sales from tourists boom
With international clientele tallying up from a total of 136 nations as of last year, foreign purchasing power is now driving a substantial share of in-store revenue in Korea.
Last year, combined foreign customer sales at its three Musinsa Select shops and 19 Musinsa Standard stores skyrocketed past 20 billion won ($13.6 million), a sixfold jump from the previous year.
Over 70 percent of foreign customer purchases come from flagship stores in Myeong-dong, Seongsu-dong, Hannam-dong and Hongdae -- renowned as some of the capital’s main hubs for shopping and trends. According to the company, nearly half of the Myeong-dong store’s customers are from abroad.
In line with the trend, Musinsa is doubling down on its global playbook, planning to roll out tax refund services and multilingual in-store assistance to enhance the customer experience, the company said.
Notwithstanding Musinsa’s online reach spanning 13 countries, the prospect of Musinsa Standard establishing physical stores overseas remains speculative at best.
“We haven’t outlined a concrete plan yet, but we’re viewing the possibility through an optimistic lens,” the company official noted.
Future bright but uncertain
Musinsa's annual consolidated sales in 2023 soared by around 40 percent on-year to 993.1 billion, with industry estimates suggesting that the company’s revenue in 2024 would surpass the 1-trillion-won mark to reach over 1.2 trillion won.
In comparison, Uniqlo posted a 15 percent year-on-year surge to 1.06 trillion won in annual sales for fiscal 2024 in Korea.
While the company hasn’t disclosed last year’s sales figures for Musinsa Standard alone, estimates suggest it had already surpassed 200 billion won in 2023, based on the performance of its in-house products.
From January to October last year, the private label’s cumulative store sales surged more than 3.5 times compared to the same period the previous year, according to the company. In October alone, offline sales hit a record high of 12 billion won in monthly revenue.
However, Musinsa reported a decline in profitability, with its operating profit of 11.3 billion won in 2022 sliding to an operating loss of 8.6 billion won in 2023 -- a setback the company attributes to strategic investments, including scaling up its private label brand.
Industry insiders note that Musinsa Standard’s future moving forward, while bright, is not certain, however.
“When Musinsa as a platform faces public backlash, its private label could serve as the much-needed growth engine,” said one industry official, referring to past scandals surrounding Musinsa, including recent quality control issues involving down jackets sold on its platform.
But doubts persist, the official said, about whether Musinsa Standard’s appeal can withstand the test of global markets.
“While Musinsa Standard’s upward trajectory remains undeniable, the real challenge will be navigating international markets dominated by powerhouses like Uniqlo and Zara, once the domestic industry reaches saturation," the official added.
By No Kyung-min (minmin@heraldcorp.com)
