What: In reaction to Coupang’s acquisition of Farfetch, Shinsegae has teamed up with Net-a-Porter.

Why it is important: Online luxury business in Korea is growing (mostly due to the fact that it was underutilized so far) but is this the right move for any of those two players?

Shinsegae Group's SSG.com is set to launch South Korea's first official store for Net-a-Porter, a global luxury e-commerce platform established in the UK and part of the Swiss Richemont-affiliated YOOX Net-a-Porter Group. Net-a-Porter, serving over 6 million customers across more than 170 countries, offers an extensive range of over 800 luxury women’s fashion and beauty brands.

This move by SSG.com comes in response to the increasing trend of South Korean consumers shopping on foreign luxury websites. The strategic alliance with YOOX Net-a-Porter will bring over 200,000 products to the South Korean market, including exclusive luxury brand collections, new products, and limited editions. SSG.com also plans to introduce other YOOX Net-a-Porter brand stores, such as Mr. Porter for men's luxury fashion.

This development is set to heighten competition with Coupang, particularly in the luxury goods sector. Coupang, through its parent company Coupang Inc., has invested $500 million in acquiring Farfetch, the world's largest luxury fashion platform. Coupang had previously ventured into luxury with its ‘Rocket Luxury’ beauty brand store and its ‘Rocket Delivery’ service for luxury cosmetics.

The online luxury market in South Korea is rapidly growing and is seen as a key growth area in the otherwise slowing domestic e-commerce market. As reported by Euromonitor, the South Korean luxury market was valued at $16.68 billion in 2021, an 11.6% increase from the previous year, and is expected to grow to $20.53 billion by 2027.

Other domestic e-commerce companies, such as Lotte On and 11st, are also expanding into luxury goods. Lotte On operates luxury specialty stores, while 11st launched ‘OOAh Luxe’, a luxury vertical service. Gmarket and Auction have opened official stores for the luxury fashion platform Catchfashion, further diversifying their luxury brand offerings.

Shinsegae and Coupang’s online battle in Korea heats up