The used transaction price of Nike’s ‘GD Force’ (nickname), created in partnership with singer G-Dragon, once reached 3 million won.
The price is 15 times the factory price (about 220,000 won). These sneakers with GD’s autograph were priced at 10 million won.
As such, with the MZ generation (millennials + generation Z) centered, sneakers and sneakers have emerged as a mainstream fashion.
One of the biggest beneficiaries of the limited edition sneaker craze is Nike Korea. Thanks to the enthusiastic MZ generation fans, Nike Korea (Nike) achieved the best performance last year.
Myeong-dong Nike Seoul Store (Photo=Nike Korea) According to Nike’s announcement on the 16th, sales in the recent fiscal year (June 2020 to May 2021) were 1.45 trillion won, up 12% from the previous year.
This is the first time Nike has announced official results in Korea. In accordance with the New External Audit Act, limited liability companies with assets and sales of 50 billion won or more have also been disclosing their earnings from this year.
Nike is estimated to have achieved more than 1 trillion won in sales in Korea only from shoes (footwear) and 400 billion won from apparel and equipment.
If you look at Nike’s other markets (Asia Pacific and Latin America), global Nike’s sales make up 68% of its sales, 28% of its apparel, and 4% of its equipment.
Considering this in domestic sales, footwear sales are estimated to reach 1 trillion won. Nike is the only brand in Korea to generate 1 trillion won in sales as a single shoe brand.
Among domestic brands, New Balance and Fila Korea are generating more than 500 billion won in sales including shoes and clothing.
As an overseas brand, Adidas Korea is known to be a bit inferior to Nike. Nike is implementing a business strategy to pursue profitability by increasing the number of directly managed stores in Korea.
This is in line with the direct-to-consumer (D2C) sales method pursued by Nike’s global CEO, John Donaho, in order to increase the operating profit margin in the mid- to long-term.
Nike Seoul, which was recently built in the Noon Square building in Myeong-dong, Seoul, is also a store directly managed by this purpose.
This is the world’s second Nike Rise concept store after Guangzhou, China. There are ‘City Replay’ where you can meet Seoul’s unique products, ‘Huddle’, a wellness space, and ‘Sports Pulse’ developed by Nike for the first time in the world.
This allows consumers to experience a variety of in-store experiences. While the number of directly managed stores is increasing, the supply to distribution channels such as shoe multi-shops is decreasing.
It is known that the supply to domestic multi-shop brands, Resmore, has been stopped, and the supply to multi-shops such as ABC Mart and Shoe Marker is gradually decreasing.
Nike is communicating with customers by releasing limited editions in collaboration with various brands and selling raffles (lottery).
Before Corona 19, the strategy was to line up in front of offline stores, but now it is leading the resell market by continuously releasing limited edition shoes.
In fact, the resell market is buzzing with the news that G-Dragon will soon launch a collaboration model with the brand Peace Minus One.
The popularity of Nike limited edition is soaring in Korea, as Jung Yong-jin, vice chairman of Shinsegae Group, also recently revealed on social media a picture of him wearing ‘Nike X Magnus Walker SB Dunk High Professional Wear Urban Outro’.
Meanwhile, according to market research firm Euromonitor, the size of the domestic footwear market last year was 5,133.4 billion won.
Among them, the sneaker market is worth 2.61 trillion won, which is half the size, the luxury shoes market is 1.74 trillion won, and the women’s and men’s shoes are 78.2 billion won.