The big three luxury platforms are in the red with tens of billions in the bank.

The number of users of luxury platform applications (apps) that grew rapidly during the COVID-19 pandemic has halved. Luxury platforms Big 3 (Balan Must It Trenby), which have been trying to attract users by showcasing big models such as Kim Hye-soo, Joo Ji-hoon, and Kim Hee-ae, are facing a growing problem.
‘Downhill’ for users of the big three luxury platforms

Source=App-retail analytics service WiseApp-Retail-Goods
The number of users of luxury platforms has generally gone downhill so far this year, according to a new industry report.

According to app-retail analytics service WiseApp-Retail-Goods, the total number of users of major domestic luxury platforms (Trenby, Balan, Mustit, and OK Mall) in January was estimated to be 734,771, a 50 percent plunge from the same month last year.

The number of users who broke the 1 million mark in December last year (909,947) slipped to 860,000 in February, and fell below 800,000 in March (867,638). The decline continued in April.

Ballan Express ad screen. /Photo: Ballan

All of the major luxury platform apps saw a significant drop in users compared to April last year. In the case of Ballan, the number of users plummeted 57% from over 600,000 to 250,000. During the same period, Mustit more than halved from 280,000 to 110,000 users. Trenby also dropped 37% to 270,000 users.

It is believed that the demand for luxury platforms has slowed down as high interest rates and high inflation have put the brakes on the trend of ostentatious consumption, or “pretentious inflation.
Big Models, Big Money…Tens of billions in the Red

Photo by Getty Images Bank
Luxury platforms have expanded their presence throughout the prolonged coronavirus (COVID-19) pandemic. As the demand for luxury goods increased due to retaliatory consumption, they expanded their customer base by signing contracts with overseas suppliers to purchase luxury goods at relatively low prices.

In response, last year, luxury platforms aggressively expanded the scale of transactions by hiring Kim Hye-soo (Ballan), Joo Ji-hoon (Must It), Kim Hee-ae (Trenby)메이저놀이터, and Kim Woo-bin (Trenby) as advertising models, but they ended up incurring large losses.

For example, Ballan, which spent 38.6 billion won on advertising last year, posted sales of 89.1 billion won, up 70.8 percent from the previous year, but a net loss of 38 billion won, more than double the previous year’s net loss of 19.1 billion won.

An external audit of the company’s 2022 financial statements found that there was a “material uncertainty regarding going concern. “Current liabilities exceed current assets by KRW655 million,” said Samdo Accounting, which conducted the audit. There are significant uncertainties that may cast doubt on its ability to continue as a going concern.”

Trenby (net loss of 21.3 billion won) and Mustit (net loss of 17.7 billion won) also lost well over 10 billion won last year alone.

Faced with such large losses, luxury platforms have changed their marketing strategies to focus on substance.

Each company is reducing marketing expenses by not introducing new big models and suspending TV commercials. They are also slimming down their organizations to reduce deficits. As the liquidity bubble burst, investments such as venture capital have sharply contracted, so they are focusing on streamlining operations.

In terms of business, the company is also strengthening its resale service for used luxury goods (Trenby), expanding sales channels (Mustit), and focusing on business-to-business (B2B) business (Ballan).

Trenby has launched ‘Shuffle’, a service that allows consumers to purchase new luxury goods with their old ones, and ‘Trenby Buyback’, a rental service, to attract existing users. Products acquired through the shuffle and buyback services are resold as ‘used’ by Trenby.

A representative from the luxury platform said, “We have been focusing on an efficiency-oriented management strategy since the second half of last year. As the luxury market has contracted this year, we will focus on streamlining operations.”

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