Coupang bids for Korean luxury market dominance with Farfetch

Coupang Inc., South Korea’s largest e-commerce player, is set to seize control of the country’s online luxury market with Farfetch amid the fast decline of the country’s once-promising luxury-only platforms.

Coupang and Farfetch announced on Monday that the global online luxury retailer’s broader foray into Korea, one of the world’s hottest luxury markets, through an integration with the R.Lux app, the Korean online retail giant’s dedicated luxury retail service.

By leveraging R.Lux's local services and operational network, Farfetch will offer Korean consumers free shipping and returns on purchases of haute couture brands through its app, in addition to Coupang’s hallmark fast delivery service.

Anyone looking to buy Dolce & Gabbana or Thom Browne fashion items from Farfetch just needs to tap the R.Lux tab on the Coupang app to search and purchase. Orders will be fulfilled by the London-based online modern luxury marketplace and delivered to Korea within four to seven days.

The Korean e-commerce giant will handle import tariffs and value-added taxes, ensuring streamlined, transparent direct purchasing experiences for Farfetch buyers. The Korean price quoted includes all duties, and refunds reflect the full paid amount.   

The service will launch with an extensive range of categories, including womenswear, menswear, shoes, bags, watches and fine jewelry from the world’s top brands such as Dolce & Gabbana, Missoni and Ferragamo, as well as emerging designers.

Farfetch expects the latest partnership with Coupang will enable the world’s top brands and boutiques to tap deeper into Korea, one of the world’s top 10 luxury markets.

“We are thrilled to offer our partners – both brands and boutiques – a tremendous opportunity. This unique gateway will significantly expand their access to the high-spending South Korean luxury market,” Stephen Eggleston, chief commercial officer at Farfetch, said in a news release.

Coupang completed its acquisition of loss-making Farfetch in January 2024 and has since transformed the business, contributing to the Korean e-commerce player’s profit.

Until now, Coupang and Farfetch had operated separately.

COUPANG’S LUXURY PUSH COMES AMID INDUSTRY SHAKEUP

Coupang’s bid to expand its presence in the Korean online designer fashion market coincides with mounting pressure on the country’s online luxury marketplaces run by smaller startups amid weakening demand for high-fashion items.

Balaan, Trenbe and Must’It ascended to Korea’s top three high-end fashion marketplaces during the COVID-19 pandemic.

But all of them are now reeling from declining sales, with Balaan under bankruptcy court protection since March and the other two seeing revenue halved.  

Korea’s bigger online retailers are now stepping in. They are moving quickly into the upscale fashion space, leveraging faster delivery and stronger consumer trust around authenticity.

Besides Coupang, GMarket Inc., which is under Korea’s retail giant Shinsegae Group, launched AdoreLux, an online cross-border service for foreign high-end brands, in May.

Gugus, Korea’s largest online retailer of secondhand luxury goods, also joined GMarket in April.

Another major online retail platform 11Street is actively promoting its luxury vertical service OOAh luxe.

Write to Tae-Ung Bae at btu104@hankyung.com
Sookyung Seo edited this article.