Korean "fast fashion" gains cachet in Asia
SEOUL (Reuters) - In central Seoul's street fashion Mecca of Dongdaemun, more than 30,000 outlets and thousands of sewing workshops packed into a 2 sq. km area (3/4 square mile) churn out clothes in as little as a day.
That's a lightning pace compared to the one to three weeks needed by global "fast" brands such as Inditex's (ITX.MC) Zara and H&M (HMb.ST).
Partly set up by displaced North Korean refugees after the 1950-53 Korean War, the shopping district was long home to seamstresses and merchants eking out a living by selling dyed military uniforms and, later, knock-offs of global luxury brands.
Now, Dongdaemun is emerging as a real power for Korea Inc, best known for its Samsung smartphones and engineering, leading its apparel industry's overseas expansion.
"Dongdaemun might be the only place on Earth where if a design is decided and ordered in the morning, raw materials can be purchased by noon at the latest and finished products start arriving at the shop on the same day," said Lim Joon-weon, director of operations at Lotte Asset Development's FitIn mall in Dongdaemun.
Behind the swift production is an ecosystem that includes 35,000 retail and wholesale clothing shops, the country's largest fabric market, and an estimated 5,000 sewing workshops of six to 10 workers each, operating in close proximity.
Similar turnaround time in an organically-formed fashion hub is unheard of even in places like Guangzhou in southern China, where the scale of the wholesale market is too vast to enable such rapid production, Lim said.
VIDEO: Korea takes the fashion world by stealth: link.reuters.com/hug38t
Privately owned E-Land Group Chairman Park Song-soo first opened a clothes shop in front of Seoul's Ewha Womans University in 1984, but is now in the forefront of the overseas expansion of Korean fashion brands.
E-Land began retail sales in China in 1997 and has carved out a slice of the fragmented fashion market as one of the top five apparel retailers, according to a 2012 Standard & Poor's report, with average annual growth of 60 percent over the past 10 years.
It has more than 2,000 outlets in China and earned $1.8 billion last year, building its growth on different fits and colours for consumers in 60 different regions.
More recent fashion groups ride the coattails of the rising fortunes of K-Pop, Korean drama and celebrities like rapper Psy.
"Right now, the biggest draw is the 'Made in Korea' label," said Yun Bum-suk, founder of fast fashion brand JEIKEI and wholesaler that yearly sells more than 3.5 million pairs of jeans in South Korea, China, Thailand and Vietnam.
"Consumers in Southeast Asia tended to respond better to the exact colour and style they've seen in Korean dramas than to clothes modified to fit local tastes."
At Singapore's Wheelock Place in the shopping district surrounding Orchard Road, a new flagship store for the Headline Seoul brand opened in late April. Its initial reception as a pop-up store in the Raffles Hotel last year was positive enough for founders to plan five more in Singapore and the Philippines and a shop in Malaysia to open later this year.
CHAEBOLS TAKING NOTE
Even units of conservative chaebols, or big business groups such as Samsung Group SAGR.UL's Cheil Industries Inc 001300.KS and LG Fashion Corp (093050.KS), are now shoring up their fast fashion brands and working on improving existing overseas stores' profitability to go toe-to-toe with global brands.
But these companies have yet to prove their staying power in Asia and leverage the anecdotal expansion of South Korean chic into actual sales.
LG Fashion, which entered China in 2004, reported a 24 percent year-on-year drop in operating profit in the first quarter of 2013 as its wholly-owned Shanghai unit and its Beijing joint venture with Lafuma SA (LAFU.PA) continued to report losses.
Cheil Industries, whose fashion business made up about 30 percent of total revenue in 2012, is considering the China launch of its new fast fashion brand 8seconds next year. But its Bean Pole brand remains a lacklustre performer in China, analysts said.
"<Chaebol fashion firms> have got the cash and the retail experience," said Park hee-jin, apparel sector analyst at Shinhan Investment Corp. "The biggest thing they need is time."
(Additional reporting by Tara Joseph in HONG KONG and Andy Ho in SINGAPORE; Editing by Miyoung Kim, Elaine Lies and Ron Popeski)
- Tweet this
- Share this
- Digg this
Trending On Reuters
While the premise of vigilante justice might be one of honest intentions, director Rensil D’Silva sullies the cause by refusing to fill up the giant craters in his script. There are gangsters who leave wads of cash in open cupboards, reporters who don’t seem to know the basics of their job, and police officers who are actually stupid enough to take bribes in the form of bags of cash delivered to their home. Full Article