2023-06-25 11:25:00
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“I can’t get past the payment window. Even if I try to buy it through resale, the price is ridiculously high.”
In March, Mr. A wanted to purchase sneakers ‘Air Force 1X Tiffany & Co’ through ‘raffle (lottery lottery)’ on the SNKR app, Nike’s official mobile store in Korea. He says that due to an error in the payment system, he only waited for access and lost the opportunity to apply.
On the resale site ‘Cream’, the resale price of this sneaker, which was released by jewelry brand Tiffany & Co in collaboration with Nike, soared to 3 million won. Compared to the release price of 529,000 won, the resale price has increased by regarding six times the list price. Currently, it is trading at around 1.5 million won.
Last February, the research company ‘Altan Insight’ announced that the average price of 100 popular sneakers for several years on the resell platform ‘StockX’ had fallen by 7% over the course of 2022. Some believe that the bubble in the resell market has burst under the influence of inflation and interest rate hikes.
In Korea, the ‘Nike Dunk Low Retro Black’ model, which has been traded in large quantities with a record price of 550,000 won, is currently being traded at a lower price than the sale price of 125,000 won.
However, the resale price of scarce products is steadily rising. Therefore, the resale price is only polarized according to product power, and the reality is that various sneakers are still traded at a high premium.
limited edition marketing frenzy
In the past, the ‘drop’ method, in which products are suddenly sold to increase the value of limited edition products, was popular, but recently, the ‘raffle’ method through lottery is gaining great popularity. ‘Raffle’ marketing is a marketing method that allows only consumers who randomly win a lottery to purchase products. Due to the craze of ‘Sneaker Tech’ in the past, it was introduced to compensate for the negative public opinion of the ‘drop’ method of waiting in a tent or hiring a part-time job for proxy purchase ahead of the release date of sneakers.
Hyo-Jun Kim, an advisor to BMW Group Korea and a special professor at Yonsei University Business School, explains, “As we are moving into an era of consumption that satisfies individual sensibilities, it is inevitable that the desire for differentiated products will grow.” Professor Kim said, “Just like the saying “supply one less car,” he said, “it makes customers’ desire to purchase peak.” In other words, since the marketing effect is maximized through limited supply, consumers “stand in a long line from dawn or go online and engage in endless click wars.” Therefore, it is expected that the release of limited edition products will continue in the industry as a means to enhance brand image.
Limited edition products are attracting attention from various fields beyond the fashion and beauty industries. Last February, LG Electronics’ notebook gram collaborated with New Jeans to release ‘LG Gram Style New Jeans Limited Edition’. The sale price was 2.49 million won, but immediately following the sale, the resale price reached up to 5 million won.
Recell Tech, what is it?
Trying to gain market profit through reselling is called ‘Resell Tech’, and it is becoming a consumption culture of the MZ generation. As the limited edition items diversify, the resell market is composed of various forms, from Chatek (Chanel + Jaetech) to Letech (Lego + Jaetech) and Starbucks Tech (Starbucks MD + Jaetech). Limited edition products have the advantage of being able to benefit from as little as 10 to 20% and as much as 10 to 20 times.
Some resellers hire part-time workers for ‘open run’ (the act of running and purchasing as soon as the store door opens) to sweep popular products. Because of this, it often happens that consumers who want to actually buy are victimized. In the industry, open-run inducement is also used as a kind of marketing tool to increase purchase desire.
However, depriving other buyers of opportunities to resell and making huge profits does not seem normal trading behavior. Nevertheless, there is no provision in the current law to punish the act of reselling by transaction. There is a possibility of punishment if sold in large quantities, but there is no standard for ‘mass’. Some brands prohibit returns and refunds, such as refusing returns and refunds, if they are determined to be a reseller.
What is the difference between recell tech and scalping?
Mr. A insists, “It is a contradiction to sell shoes at a high price and hate scalpers.” In fact, as reselling, which resells limited edition products and makes profits, is attracting attention as a means of investment, more and more people are considering scalping sales as part of investment. According to Article 3, Paragraph 2 of the ‘Minor Crime Punishment Act’, ‘if you sell illegal tickets at stadiums, concert halls, etc., you will be fined up to 200,000 won or detained or fined’. There are still no penalties for online ticket sales.
An official from the performance industry said, “Illegal tickets through other routes are canceled without prior notice under the authority of the organizer” and “identification is confirmed when receiving the ticket on-site”, but “it is unreasonable to catch a scalping transaction without the organizer’s efforts.” says. Reorganization of the law to eradicate scalping tickets is an urgent matter.
The biggest difference between ticket scalping and resell technology is that concert tickets or game tickets lose their value following the date, so it is difficult to view them as financial technology. Except for this point, only the product being traded is different, but the purpose of the action is the same. Regarding Resell Technology, some netizens are showing opinions such as “it should be eradicated because it takes unfair profits” and “all Resell should be opposed to be fair”.
For a healthy trading culture
Although it is not a problem legally, reselling is definitely immoral. It should not happen to deprive consumers of the opportunity to actually purchase by packaging it with the grandiose name of ‘Reseller’. Professor Kim Hyo-joon emphasizes, “For transparent and fair measures, it is necessary to make efforts to allow genuine customers to participate in product purchases, such as introducing a macro prevention function through personal identification.”
A brand is a promise to customers. It is necessary to stabilize prices for a healthy culture and art industry by balancing customer demand and brand position. To this end, changes in the perception of the industry and consumers for transparent and fair trade will have to be made.
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