With a highly skilled labor force and integration process that flows between entities within a supply chain, wherein each stream of activities of overall operations from the initial production phase to the endpoint of sales are organically combined, the fashion industry in Korea has constantly grown so far.
It’s indeed the textile and clothing business that laid the foundation for the country’s economic growth during the period of industrialization. Today, industry-wide changes such as highly advanced garment technologies; world famous fashion designers; a cross-sales channel integrating both on and offline networks; women empowerment in the industry; and the ever growing popularity of K-pop which helps shape a positive image of Korea worldwide have come out as the new growth drivers, helping the fashion industry keep scaling up, while being part of higher-value added services.
With recent trends where people start to put more value on work-life balance as they earn more, the fashion industry is getting diverse. This phenomenon stands out even more due to consumers’ lifestyle changes, which have brought out smarter consumption habits and market polarization. Under such circumstances, some brands capable of small batch production, capturing designers’ identities of their own have improved the client base online.
Running counter to the industry outlook, which initially depicted a rosy forecast with a growth rate of 1.2 percent despite external challenges that came into play, market performance until now has slipped into a severe downward spiral due to the coronavirus pandemic, sweeping across the entire world early this year. Supply and demand imbalances in the first quarter of 2020 is likely dragging down a turnover of 80 percent year-over-year, and the impact on offline sales looks much grimmer.
Contrary to the market predictions, however, online sales grew 18.9 percent and 13.5 percent via e-commerce and m-commerce platforms respectively, which signals frame-breaking changes that completely alter the underlying marketing strategies for business after coronavirus.
The recent COVID-19 pandemic appears to spur the apparel industry on to accelerating investment in online sales channels, which would accordingly lead fashion brands to test technologies like big data analytics, artificial intelligence, virtual or augmented reality, and smart factory to improve exclusive customer service and market competitiveness.
Such tech-experiments are expected to help grow both fashion and tech industries.
In a time when the pandemic has redefined the global new normal, Korea’s fashion business (“K-fashion” for short) is anticipated to develop survival strategies in the post COVID-19 world and go global, tapping into new markets through cross-border business models (e-commerce).
[Fashion industry market size and growth outlook]
(Source: Korea’s fashion market trends, 2H 2019 (Korea Federation of Textile Industries)
By Lee, Suk-hyun (firstname.lastname@example.org)
Team Leader, Fashion Business Team, Korea Research Institute for Fashion Industry
< *The opinions expressed in this article are the author’s own and do not reflect the views of KOTRA. >