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(Yonhap Interview) Online luxury goods marketplace boasts new real-time database system

On the Record: Executive Interviews 08:58 October 06, 2022

By Kim Boram

SEOUL, Oct. 6 (Yonhap) -- In the luxury goods market, offline customer services are considered important for lavish shoppers. European designer brands offer top-notch and exquisite services to their loyal clients when visiting brick-and-mortar stores to build strong connections.

But the yearslong COVID-19 pandemic has affected the big but closed market, changing the consumption patterns of such lavish shoppers and expanding the range of customers.

E-commerce sales of luxury items in South Korea increased on rising consumer demand for online shopping, while young people, who have been sidelined from the costly boutique products, became notable consumers.

Yoon Jae-seob, CEO of GUHADA, in this photo provided by GUHADA (PHOTO NOT FOR SALE) (Yonhap)

Yoon Jae-seob, CEO of GUHADA, an online marketplace for fashion items, including clothes, bags and shoes from luxury brands, said his company is on the frontline to capitalize on this shifting consumer behavior and demography through its advanced application programming interface (API) technology.

"Applying the API, we simultaneously connect the inventory data of some 50 luxury brand providers with our database," he said in an interview with Yonhap News Agency on Tuesday. "It helps our customers look around the full list of their products on a real-time basis and buy one at a cheaper price."

He said GUHADA can provide 200,000 goods from more than 1,000 luxury brands to customers at a price some 30-40 percent cheaper than from offline stores, as it is in direct partnership with major business-to-business wholesale distributors who handle many designer brands, like Dior, Prada, Celine and Moncler.

The price includes all shipping expenses and administrative charges, as well as tariffs, he added.

Thanks to the real-time database system, GUHADA showcases new arrivals as fast as the luxury brands release them, while local department stores need to wait for a while to receive the first shipments from overseas.

Large online shopping malls, like Lotte On, an e-commerce platform operated by retail giant Lotte Group, are also GUHADA's clients, because its API-powered real-time inventory database is also useful for Lotte's business.

The 38-year-old businessperson said his company is the only one in South Korea that is able to link the inventory management systems of 50 boutiques at the same time.

"Many local platforms, like us, have their own API technologies, but they can communicate with one to 10 wholesalers," he said. "You need to standardize the data that you receive from multiple vendors."

This image provided by GUHADA shows the company's business model powered by application programming interface (API) technology. (PHOTO NOT FOR SALE) (Yonhap)

Yoon said his company puts high priority on building confidence with customers, who might think purchasing luxury items online comes with a series of risks, particularly about whether it is authentic.

"We check whether the purchased item is fake or not right after it arrives in South Korea," he said. "And we record all quality control and packaging procedures, and share the footage with the customer."

GUHADA started its business in 2019 and grew to be one of the biggest online marketplaces for designer brands in South Korea with a monthly revenue of 1 billion won (US$708,000). It has more than 300,000 members and recorded 1.8 million monthly active users on average.

Yoon said his business is motivated by the increasing preference for foreign brands of the young generation that no longer thinks those valuable goods are a symbol of high rollers. Nearly 70 percent of its customers are in their 20s and 30s.

"Young people want to express their unique fashion style with luxury goods. They don't want to display them ostentatiously," he said. "They think it is a matter of personal choice, and they buy items that are rarely chosen. We help them buy such goods at reasonable prices."

This image provided by GUHADA shows a page of the company's mobile application. (PHOTO NOT FOR SALE) (Yonhap)

brk@yna.co.kr
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