Sharing economy

Sharing Economy: Are South Koreans Ready to Use ‘Airbnb for Clothes’?

Business

When I was a first grader in elementary school back in 2000, my school, along with most in South Korea, took part in a government-led campaign called “Anabada.” An acronym formed from four Korean phrases — be frugal, share, trade, and re-use — Anabada began in 1998 as a nationwide effort to recover from the aftermath of the 1997 Asian financial crisis by bringing in new and used items and selling them at bargain basement prices.

In South Korean society, which had little in the way of a thrift store or garage sale culture, Anabada felt like a novelty.

In the two decades since the economic crisis, South Korea has managed to pull off another economic miracle. At least statistically, its economy has largely recovered after the IMF bailout. However, the past decade has seen a proliferation of NGOs and governmental and private entities allowing people to rent and share clothes for and not for profit.

The Clozet, founded in July 2016, is the latest South Korean startup to echo certain aspects of Anabada — by attempting to get women to share the clothes they don’t wear for profit. The P2P fashion sharing platform acts as a bridge for women to share their own clothes with others.

Apparel rental is nothing new. The idea of renting out clothes through subscription service has already been put into practice in places including the United States (Stitch Fix) and Japan (AirCloset).

In South Korea, Project Anne, an O2O service from SK Planet (part of the SK Group), has been renting out clothes since September 2016. For a monthly subscription of either 80,000 or 130,0000 won ($74 or $120), women can rent either four or eight trendy garments sourced by a professional stylist and delivered to their doorstep.

But The Clozet founder Seong Ju-hee wanted to offer a more sustainable and innovative way of sharing garments. The result is something like an Airbnb for clothes.

“The average number of clothes in their closet that women do not wear is 57,” Seong told Korea Exposé. “I think women wear 10 to 15 percent of clothes they own.” Seong’s service targets the closets of female professionals in their 20s and 30; she says over 70 percent of her clients work for big and medium-sized corporations.

The Clozet founder Seong Ju-hee organizes clothes to be rented. (Courtesy of The Clozet)

The process of sharing is simple. The user fills out an online application form or takes a quick photo of her garment and sends it to The Clozet via Kakao Talk, South Korea’s leading messaging app. If the photo passes an initial image-based screening, The Clozet picks it up and screens it directly. The approved item is then washed, photographed and uploaded for perusal by renters. (The screening process is quite strict: Only 30 to 40 percent of garments pass the first stage.)

Renters can mix and match up to three items from among the three hundred brands of clothes and bags The Clozet accepts, ranging from Chanel, DKNY and Max Mara to premium local brands such as Kye and SJYP. Monthly subscription fees range from 59,000 to 118,000 won ($55-110).

At the end of the subscription period, a delivery person picks up the garment from a destination of the renter’s choice for free and brings it back to The Clozet to be cleaned and stored for the next renter.

Seong says her startup helps women make a profit while utilizing clothes they don’t even wear. And to lessors, the Clozet pays up to 300,000 won ($279) at the end of each month according to how many of their garments are rented out.

South Korea’s sharing economy was estimated to be worth as much as 730 billion won ($681 million) in 2013, according to a 2015 report by the country’s Ministry of Trade, Industry and Energy. The same report forecast that the sector would grow to more than 13 trillion won ($11.98 billion) by 2025.

Seong said the number of rentals from The Clozet was growing by 30 percent monthly, with the number of sharers rising 30-fold in just six months.

The sharing economy is not without skeptics. According to a December 2016 report by Korea Institute for Industrial Economics and Trade, Asia accounts for just one percent of the global sharing economy market; the report attributed the low level of enthusiasm in the South Korean market to lack of credibility in transactions and inadequate promotion of services.

But Seong is still aiming high: “My goal is to open the wardrobes of 100,000 women in Seoul and to create a world where we no longer need big closets,” she said. 

 

Cover image: An assortment of clothes. (Source: Geneva Vanderzeil via Flickr)

Juwon is a journalist at Korea Exposé covering all things business. She’s previously worked as a TV producer in Channel News Asia in Singapore and has interned for Bloomberg, AP and Google. Juwon is a proud owner of her dog Noah and a graduate of Journalism and Media Studies Centre at the University of Hong Kong.