The second-hand luxury goods market is worth W1 trillion and growing rapidly in Korea as the country is seeing increasing appetite for luxuries (US$1=W1,188). The Wall Street Journal recently cited it as one of the most "luxury friendly" markets in the world.   

◆ Investment and Addiction

In the upscale neighborhood of Apgujeong in the affluent Gangnam area, there are more than 30 well-known second-hand luxury shops such as Koibito, Gugus, and Cash Cash. Nationwide there are about 100. As the business thrives, many customers realize that buying Chanel, for instance, can be an investment. The local price of Chanel goods is higher than overseas and rising, so people still make money by selling items they bought in duty free shops or abroad to second-hand shops.

One 32-year-old woman says, "A Chanel bag I bought a year ago in a duty free shop for US$3,000 currently sells at up to W4.5 million. You can make 5-10 percent if you keep the warranty card and the receipt."

The high prices reflect demand. Used luxury goods shops owners say some addicts come and sell a two-month-old item they bought in installments with a receipt because they are bored with it, and they pick up a different item in the shop. "There are a lot of fans who sell and buy luxury goods several times a year," a Cash Cash staffer says.

A customer looks at a handbag at a used luxury shop in Apgujeong-dong, Seoul.

◆ Recession-Free Market

The second-hand luxury market has benefited from the global recession. Many people tried to cash in luxury items they did not use, and many luxury fans turned to the second-hand market as they could not afford new ones.

A staffer at a second-hand shop says, "With the growing number of professional single women with high purchasing power, some customers buy all the items that are in vogue." Around 200 to 300 transactions are completed every day in Gugus' online and offline shops.

There is a risk that some of the goods may be smuggled or stolen items, but that does not seem to bother customers much who simply want to get their hands on a luxury item. An industry insider says, "People feel they are falling behind if they don't have at least a single luxury item, and that is what's behind the expansion of used luxury goods market. The global hub of second-hand luxury goods is shifting from Japan to Korea."