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[Newsletter] Fashion Market for Innovation
Date
2022.07.18
Views
288

 

An ambitious start-up has appeared in Jeju with the determination to lead a digital transformation of the DDM(Dongdaemun) fashion market(Korea’s largest wholesale and retail shopping district). “What would happen if E-Mart, a South Korean retail giant with KRW 15 trillion in annual sales, settles all payments manually? Can you believe that there is a company doing KRW 18 trillion worth of transactions in cash and compiling the receipts and the invoices by hand? Yes, there is. It is the DDM market,” said CEO Kim Myung-gun of Biguncle Company Inc., who asserts the DDM market should be innovated with digital transformation.

 

Kim Myung-gun, CEO of Biguncle Company Inc.,

 

The DDM market has always been at the center of the Korean fashion industry. The “Peace Market” selling apparel machine-sewn by the war refugees took 70% of the domestic fashion market in the 1960s, marking the beginning of a modern fashion mall in Korea. The Peace Market has been conservative, insisting on a conventional and outdated way of doing business. Many stores are complaining about overtime work for manual closing of transactions, lost transaction records, and loss or mis-delivery of the goods. That is why Kim decided to transform the DDM market in general.

 

The DDM fashion market, the center of the Korean fashion industry, does KRW18 trillion worth of transactions per annum backed by the outmoded system. ⓒClo:D captured image

 

“Still, many workers in the DDM market do their jobs without a business registration or a labor registration. This system can’t last, especially in this digital age, where everything goes digital. The digital transformation of the DDM market will make or break the merchant community in the 4th industrial revolution.”

 

Retail solution with digital innovation

 

Launched less than a year ago, the company took more than a year for service preparation. That much time was required because, most of all, a technology reflecting the actual operations was crucial to building a digital service platform. The start-up support policy by the Jeju government was a great help for him.

 

CEO Kim Myung-gun in IR presentation at J-Investor’s Day hosted by Jeju Center for Creative Economy and Innovation (J-CCEI) ⓒ

 

“When I began preparing for my business, I learned that many agencies in Jeju offered start-up training programs and business support programs. I benefitted from a lot of training and mentoring services of those programs, learning tax and labor information needed for business operations. As a result, I was selected to enroll in a start-up support program and successfully attracted investments.”

 

The digital platform created by Biguncle Company Inc. is best displayed by the computerization of the “Agent Biguncle” operation, a purchase agent service for the DDM market. He avoided simply converting an off-line market into an online shopping mall. When a seller and a purchaser are connected online, their transaction takes a week at least to finalize, because the home-delivery service requires a large volume of the goods. But if a seller and a purchaser use Agent Biguncle, who visits the DDM market every day, the purchaser can have their goods delivered in one day.

 

“In the DDM market, there is a unique layer for an agent service between a wholesaler and a retailer. The unique apparel distribution system of the DDM market is hard to know for an outsider. Actually, many start-ups and platforms created to address the issues of the DDM market have failed, because those players began services without much understanding of the DDM system. If a service operation is weighted too much towards technology, the solutions would be rather at odds with reality.”

 

Kim took communication with developers most seriously. To have a technology accommodating the DDM market landscape to the fullest, a developer must understand the DDM market system. Kim tried to thoroughly experience the market for one year with the developers and focused on proper communication with them. Thanks to their efforts, his experiences and ideas were well incorporated into the technology developed. That’s how the ‘clo:D,’ the fashion platform application of Biguncle Company, was born.

 

Digital platform of Biguncle Company, ‘clo:D’. Agents and partners are allowed to register. ⓒBiguncle Company

 

Fashion Mecca for the age of the 4th Industrial Revolution

 

“I was able to invite three agent service providers while running clo:D in pilot operation. From that point, around 500 service providers registered. The annual transaction value of our members is estimated to be KRW 25 billion.”

 

The company outgrew his expectation. Users left comments that they saved time thanks to the digital closing function. Their testimonials proved that the platform service built upon his real experiences effectively resolved the inconvenience of the market operations. It was made possible because Kim, who knew the market well, and the developers, who understood the market system, worked through a fantastic collaboration. It has been said that start-up investments have been shrunken both at home and abroad as the pandemic is nearing the end, but it is not the case for the DDM market, the very playground of the Biguncle Company. The DDM market is making a turnaround, indeed. Given the size of the domestic and global fashion markets, valued at KRW70 trillion and KRW 110 billion respectively, a window of opportunity is opening now as the pandemic is receding, according to Kim.

 

“If venture capitalis invested carefully, a labor shortage plaguing the IT sector will be eased, and good companies would be able to bring in the right talents. The DDM fashion market has remained even with a serious pandemic situation, and still does as the fear of the pandemic eases off.”

 

A new road, paved by a pioneer company of Jeju, is slowly opening up the DDM fashion market, leading towards the digital age.