E-Land Retail pioneered this model locally, launching its first “NC PIKS” store in Dangsan in 2013. (Image courtesy of E-Land Retail)
SEOUL, Feb. 24 (Korea Bizwire) — With persistent high inflation straining consumer budgets, “off-price” retail (OPR) stores in South Korea are experiencing rapid growth, enticing customers with premium brand clothing at discounts of up to 90%.
Originally emerging in early 20th-century America, off-price retail involves purchasing surplus or past-season items directly from brand owners and reselling them at dramatically lower prices. While already mainstream in North America—with over 6,700 stores across the U.S. and Canada—this retail model is just beginning to take hold in South Korea.
E-Land Retail pioneered this model locally, launching its first “NC PIKS” store in Dangsan in 2013. Following suit, Shinsegae opened its “Factory Store” at Starfield Goyang in 2017, now operating 18 locations. Hyundai Department Store entered the market with its “OFFWORKS” brand in 2019 and currently runs five outlets nationwide.
The appeal of OPR lies in unmatched value, offering not only established luxury brands but also “new luxury” contemporary labels at significantly lower prices than traditional outlets. The substantial discounts, far exceeding the typical 30-50% offered by conventional outlets, result from direct overseas sourcing, eliminating intermediary costs.
At NC PIKS, dedicated merchandise directors stationed in the U.S. and Europe ensure weekly shipments of freshly sourced items to South Korea. The stores use “reverse-engineered pricing,” strategically purchasing products that meet consumers’ price expectations based on thorough market research.
Another key cost-saving strategy involves minimalistic store layouts resembling warehouse outlets, significantly reducing operational expenses. One NC PIKS shopper remarked, “The clothes are casually piled everywhere, giving it a flea-market feel, yet they’re top fashion brands—it’s fascinating.”
Rapid consumer adoption of OPR is clear in recent financial results. Shinsegae Factory Store surpassed 100 billion won in sales last year, a thirteen-fold increase since its launch. Although smaller than traditional department stores—which recorded over 7.2 trillion won in annual sales last year—OPR’s growth rate is striking, nearly ten times higher.
Hyundai’s OFFWORKS similarly achieved over 30% sales growth last year, outperforming other retail platforms under Hyundai Department Store Group. New customers accounted for up to 40% of total shoppers in 2024, demonstrating robust expansion potential.
With inflationary pressures expected to persist throughout 2025, industry experts anticipate continued rapid growth in OPR. Responding to growing demand, Shinsegae plans to open four additional stores domestically this year and its first international outlet in Vientiane, Laos. NC PIKS aims to expand its brand portfolio from 200 to 300 labels, enhancing the treasure-hunt shopping experience that has resonated strongly with South Korean consumers.
Lina Jang (linajang@koreabizwire.com)
