SHORT ARTICLES
Kicks rule everything around me
What does “kicks rule everything around me” mean? Kicks mean sneakers in this phrase; therefore the sentence implies the importance of sneakers. “Kicks Rule Everything Around Me” is an abbreviation of KREAM, which is the most popular resale platform app in Korea - it occupies over 70% of the Korean resale market.
Users sell and buy fashion items such as sneakers, sweatshirts, and even luxury products through KREAM. Premium items include accessible luxury products to high-end items. In fact, KREAM specializes in buying and selling limited edition items such as sneakers that cannot be found in general stores. I also have used the platform to buy my limited edition Nike sneakers. They can only be bought by a lucky draw, where products are only sold to those who win through a lottery and are not available elsewhere. Furthermore, it’s possible to buy products at a relatively low price and sell them at a higher price if you are lucky. On KREAM, prices of products always change based on a stock market principle, where demand and supply cause frequent booms and busts. For example, the price of one pair of Nike sneakers went up to \300,000 last year but dropped to \100,000 when the demand for it decreased.
Resale platforms are a big trend in the e-commerce market. In 2022, KREAM’s sales recorded \45.9 billion, which was an increase of 1300% from 2021, and its annual transaction volume reached \1.5 trillion. KREAM’s mobile app also recorded 4 million monthly active users as of 2022. What has caused the rapid growth of KREAM?
Crucial differences between KREAM and existing secondhand platforms have contributed to its popularity. The biggest difference is that users can only sell new products on KREAM. KREAM also offers a verification system that distinguishes brand products from fake items. Thanks to this verification system, users can trust and purchase brand or luxury items. There are many fake items on consumer-to-consumer(C2C) transaction platforms because users who want to buy items have no choice but to trust the words of the sellers that it is genuine. Most secondhand platforms are based on C2C transactions where users directly contact others. But users who want to sell items on KREAM must first send them to KREAM’s office, which will re-send items to other users who want to purchase them after its verification process. This allows users to trust the transaction process without worrying about counterfeit goods or leakage of personal information.
So, how does KREAM make money through this resale platform that connects buyers and sellers? KREAM charges a commission fee of 7% in its verification process and this charge is the main source of its revenue. At first, KREAM didn’t charge any commission fees to acquire users. This resulted in KREAM recording an operating loss of \59.5 billion in 2021. It was ‘planned loss’, which means it was intended by KREAM. Its goal was to increase its market share without earning a commission fee and it has definitely achieved its goal.
However, KREAM is not without its controversies. As mentioned above, KREAM occupies over 70% of the Korean resale market which means KREAM has almost monopolized the resale market in Korea. As KREAM is owned by Naver, the biggest big tech company in Korea, it has sufficient capital to expand its business. KREAM is continuously increasing the commission rate charged on sales and purchases, so there are concerns that burdens on consumers will increase. However, since KREAM has already monopolized the Korean resale market, users will have to continue using KREAM without any other alternatives.
Today, the scale of the resale market is getting bigger. The size of the Korean resale market was \700B in 2021 and exceeded \1 trillion in 2022. It is expected to grow to \2.8 trillion by 2025. Generation MZ is the main user of the resale market. They prioritize ‘value consumption,’ which seeks to express individuality through consumption and this has increased the demand for rare items that are difficult to buy even with money. In particular, ‘raffle marketing’, which sells limited edition products through random gambling competitions, boosted the growth of the resale market. Raffle marketing and lucky draw events, which give the opportunity of buying items to winners, have a high competition rate. For popular items, the competition ratio is nearly 10,000:1. People with raffle prizes get rare items and sell them at a higher price on resale platforms.
Resale platforms are a big trend not only in Korea but also abroad. The scale of the global resale market reached $36 billion in 2022 and it is expected to reach $77 billion by 2025. This means resale platforms like Korea's KREAM are gaining popularity in many countries. For example, StockX in the US succeeded in becoming a unicorn in the industry with a corporate value of over $1, and it is the first resale platform that applied the principle of the stock market. Experts believe the scale of the resale market will continue to grow. If this trend continues, more people will buy their fashion items on the resale platform, not on the brands’ websites, and the resale market may evolve into a full-fledged e-commerce system. This will be a big change in the e-commerce market.
Users sell and buy fashion items such as sneakers, sweatshirts, and even luxury products through KREAM. Premium items include accessible luxury products to high-end items. In fact, KREAM specializes in buying and selling limited edition items such as sneakers that cannot be found in general stores. I also have used the platform to buy my limited edition Nike sneakers. They can only be bought by a lucky draw, where products are only sold to those who win through a lottery and are not available elsewhere. Furthermore, it’s possible to buy products at a relatively low price and sell them at a higher price if you are lucky. On KREAM, prices of products always change based on a stock market principle, where demand and supply cause frequent booms and busts. For example, the price of one pair of Nike sneakers went up to \300,000 last year but dropped to \100,000 when the demand for it decreased.
Resale platforms are a big trend in the e-commerce market. In 2022, KREAM’s sales recorded \45.9 billion, which was an increase of 1300% from 2021, and its annual transaction volume reached \1.5 trillion. KREAM’s mobile app also recorded 4 million monthly active users as of 2022. What has caused the rapid growth of KREAM?
Crucial differences between KREAM and existing secondhand platforms have contributed to its popularity. The biggest difference is that users can only sell new products on KREAM. KREAM also offers a verification system that distinguishes brand products from fake items. Thanks to this verification system, users can trust and purchase brand or luxury items. There are many fake items on consumer-to-consumer(C2C) transaction platforms because users who want to buy items have no choice but to trust the words of the sellers that it is genuine. Most secondhand platforms are based on C2C transactions where users directly contact others. But users who want to sell items on KREAM must first send them to KREAM’s office, which will re-send items to other users who want to purchase them after its verification process. This allows users to trust the transaction process without worrying about counterfeit goods or leakage of personal information.
So, how does KREAM make money through this resale platform that connects buyers and sellers? KREAM charges a commission fee of 7% in its verification process and this charge is the main source of its revenue. At first, KREAM didn’t charge any commission fees to acquire users. This resulted in KREAM recording an operating loss of \59.5 billion in 2021. It was ‘planned loss’, which means it was intended by KREAM. Its goal was to increase its market share without earning a commission fee and it has definitely achieved its goal.
However, KREAM is not without its controversies. As mentioned above, KREAM occupies over 70% of the Korean resale market which means KREAM has almost monopolized the resale market in Korea. As KREAM is owned by Naver, the biggest big tech company in Korea, it has sufficient capital to expand its business. KREAM is continuously increasing the commission rate charged on sales and purchases, so there are concerns that burdens on consumers will increase. However, since KREAM has already monopolized the Korean resale market, users will have to continue using KREAM without any other alternatives.
Today, the scale of the resale market is getting bigger. The size of the Korean resale market was \700B in 2021 and exceeded \1 trillion in 2022. It is expected to grow to \2.8 trillion by 2025. Generation MZ is the main user of the resale market. They prioritize ‘value consumption,’ which seeks to express individuality through consumption and this has increased the demand for rare items that are difficult to buy even with money. In particular, ‘raffle marketing’, which sells limited edition products through random gambling competitions, boosted the growth of the resale market. Raffle marketing and lucky draw events, which give the opportunity of buying items to winners, have a high competition rate. For popular items, the competition ratio is nearly 10,000:1. People with raffle prizes get rare items and sell them at a higher price on resale platforms.
Resale platforms are a big trend not only in Korea but also abroad. The scale of the global resale market reached $36 billion in 2022 and it is expected to reach $77 billion by 2025. This means resale platforms like Korea's KREAM are gaining popularity in many countries. For example, StockX in the US succeeded in becoming a unicorn in the industry with a corporate value of over $1, and it is the first resale platform that applied the principle of the stock market. Experts believe the scale of the resale market will continue to grow. If this trend continues, more people will buy their fashion items on the resale platform, not on the brands’ websites, and the resale market may evolve into a full-fledged e-commerce system. This will be a big change in the e-commerce market.
