[NewsSpace=Jack Moon] "Never seen anything like it."
Last weekend, I roamed the streets of Seongsu-dong in Seoul, camouflaged as Gen MZ. After visiting the newly opened Musinsa offline store, I noticed the new Olive Young store opened right across the street. The online fashion powerhouse facing off the No.1 offline health & beauty store on the same street offered a striking view. Seongsu-dong has evolved far beyond being just a hipster sanctuary; it has become the new battleground for retail giants. What caught their attention? Which side is Gen MZ on?
Seongsu-dong is emerging as a new battleground for the beauty and fashion industries, particularly with the competition between Olive Young, the health and beauty enterprise, and Musinsa, the fashion platform. Both have captured the hearts of Gen MZ in their respective domains and are now challenging each other's territories.
Presence of mega brands in Seongsu-dong is also shifting the local commercial real estate market. According to the Korea Real Estate Board's commercial real estate rental trend survey, as of Q4 2023, the rent for medium and large-sized stores in Seongdong-gu, which includes Seongsu-dong, increased by 5.7% year-on-year.
This significantly surpasses Seoul's average increase of 3.2%. The increase is particularly pronounced near the cafe street where Olive Young and Musinsa have opened stores. According to RSQUARE, the first-floor rent in this area jumped from about 150,000 won/py in 2022 to 250,000 won/py in early 2024 that recorded a 66% increase.
Olive Young has been targeting Gen MZ by leveraging its offline stores. The convenience of experiencing and purchasing various brands in a single venue, the ability to test new products on site, and the trendy vibes have resonated with the young generation. In contrast, Munsinsa began as an online fashion platform, targeting Gen MZ's online shopping habits with its user-friendly UI/UX, diverse brands and styles, and unique content strategy.
Why these two mega brands chose Seongsu-dong as their offline battleground is clear; Seongsu-dong emerged as the ‘go-to neighborhood’ in recent years, drawing Gen MZ with unique cafes, restaurants, and select shops that pass their vibe checks. The industrial environment also provides a suitable backdrop for brands to express their identity.
It's not easy to foresee who has the edge in the competition. Olive Young boasts proven offline operation know-hows and an extensive store network. Musinsa showcases personalized services based on a deep understanding of Gen MZ's online shopping habits and data. Ultimately, the winner will be determined based on how effectively they integrate online and offline channels.
