Korean Fast-Fashion Brands Beat Foreign Rivals

Korean fast-fashion brands Topten10 and SPAO have beaten Zara to become the second and third most popular in the domestic market and are challenging No. 1 player Uniqlo.

As recently as 2019, Uniqlo's sales here were almost three times higher than Topten10's, but the difference narrowed to around 30 percent last year, and its sales rose from W334 billion to W430 billion over the period, while Uniqlo's shrank from W974.9 billion to W574.6 billion (US$1=W1,146). Industry watchers forecast Topten10 will overtake Uniqlo this year.

Topten10 and SPAO opened more and more stores despite the coronavirus pandemic and joined hands with other design and entertainment businesses to come up with collaborative products. Online fashion sales platform Musinsa opened an offline store with its own fast-fashion brand.

Rock-bottom prices and aggressive expansion despite the pandemic were the main reason for the local brands' success. Even before the coronavirus pandemic, Uniqlo's sales in Korea were hit by a boycott of Japan, and the number of its stores here fell from 190 in 2019 to 157 last year. It shut down 13 more stores this January and February alone.

The pandemic also persuaded Zara and H&M to shut outlets.

Left: Promotional banners for Topten10 festoon a building in Seoul's trendy Hongik University area on Monday. Right: People wait in line outside a newly opened Musinsa store in Seoul's trendy Hongik University area on May 28.

Topten10, on the other hand, burgeoned from 134 outlets in 2016 to a whopping 425 last year, opening 115 new stores last year alone while another 30 more are planned this year. SPAO, a subsidiary of E-Land Group, saw the number of stores rise from 92 in 2019 to 110 last year.

This has turned the once-trendy Hongik University area into a battleground for local fast-fashion brand outlets. Topten10 opened a new store there late last month, and in May Musinsa opened a store selling its own brand of apparel called Musinsa Standard. SPAO has had a store in the neighborhood since 2018. But Uniqlo and Zara closed their stores there last year.

According to the Korea Federation of Textile Industries, the domestic clothing market shrank two percent last year to W40.8 trillion, but local fast-fashion brands are bucking the trend. Topten10's sales surged 30 percent last year and doubled on-year in the first quarter of this year to W120 billion. SPAO's sales increased by around W10 billion last year to W330 billion, and Musinsa Standard's surged 76 percent to W110 billion.

Their main advantage is that they are even cheaper than their international rivals. Topten10's and SPAO's main products cost between W10,000 and W20,000, while Uniqlo's mostly have price tags of more than W30,000.

"We have seen a sharp polarization of consumer spending due to the pandemic, favoring either very expensive luxury brands or dirt-cheap clothes, and there domestic brands have the edge," an industry insider said.