6 out of 10 Fashion Platform Users Say "Commission Fees Are High Compared to Entry Benefits"

Survey by Korea Federation of SMEs... "Commission Appropriate" Response 40.3%
Average Commission 26.7%... About Twice Compared to Shopping Mall 13.6%
W Concept 28.3%, 29CM 28%, Musinsa 27.6% in Order

Clothing from Musinsa's in-house brand 'Musinsa Standard' on the fashion platform Musinsa. The photo is unrelated to specific expressions in the article. Photo by Musinsa

[Asia Economy Reporter Junhyung Lee] Among companies using fashion platforms, 6 out of 10 (59.4%) perceive the commission fees as high compared to the benefits of being listed.

The Korea Federation of SMEs announced on the 22nd that this was the result of the "Online Fashion Platform Survey" conducted on 500 companies registered on fashion platforms.

The level of sales commission fees perceived by tenant companies on fashion platforms.
Photo by Jungso-Gieop Junganghoe

40.3% of companies responded that the commission fees paid to the platform were appropriate relative to the benefits of being listed. No companies responded that the fees were low.

The average sales commission fee for fashion platforms was 26.7%, about twice as high as the average commission fee for online shopping malls in 2019 (13.6%). 'W Concept' had the highest fee at 28.3%, followed by '29CM' (28%) and 'Musinsa' (27.6%).

Among the listed companies, 5 out of 10 (48.6%) reported feeling pressured to raise prices or reduce production costs due to the commission fee burden. Other major difficulties included 'burden from free shipping policies' (23%), 'ambiguity in exposure order criteria within categories' (21.6%), and 'sales erosion due to platform's own brands' (10.6%).

Difficulties Experienced by Fashion Platform Tenants.
Photo by Korea Federation of SMEs

81.2% of companies were small-scale businesses with annual sales under 3 billion KRW. Companies with annual sales under 500 million KRW accounted for 52.6%.

On average, listed companies earned 29.1% of their annual sales through the platform. The smaller the annual sales, the higher the dependence on fashion platforms relative to their total sales.

Choo Moon-gap, Director of the Economic Policy Headquarters at the Korea Federation of SMEs, said, "Recently, many fashion platform vendors have complained about excessive commission fee burdens," adding, "Since most listed companies are small-scale businesses, the commission fee burden could undermine market stability and ultimately be passed on to consumers."

Director Choo added, "We are pushing for the prompt passage of the Online Platform Fairness Act and that detailed surveys should be conducted in the future to prevent blind spots from occurring."

This content was produced with the assistance of AI translation services.