The average handling fee is 26.7%! 60% of Korean sellers say Korean fashion e-commerce platforms charge too much

The Small and Medium Business Administration of South Korea announced on the 22nd that it had conducted a survey on 500 sellers on online fashion platforms .

The survey results show that for the brand companies that have settled in, sales through fashion platforms account for an average of 29.1% of total sales.

Fee levels compared to the effect of entering the fashion platform

The average sales commission rate of Korean fashion platforms is 26.7% . Compared with the effect obtained after entering the platform , 59.4% of sellers think that the level of commission is higher than the effect of entering the fashion platform , and 0% think that the commission is low. Based on the average score of 100 points, the score indicating an appropriate level is only 32 points.

As for the difficulties encountered in entering fashion platforms, the highest proportion ( 48.6%) is " pressure to raise prices or reduce production costs due to the burden of handling fees ." In addition, " the burden of free delivery " ( 23.0%), "ambiguity of the exposure order standard within the category" ( 21.6%) and " sales cannibalization caused by platform PB brands " ( 10.6%) are the main difficulties for companies entering .

According to the survey, 81.2% of the companies on the Korean fashion platform are small businesses with annual sales of less than 3 billion won, and those with annual sales of less than 500 million won (about 2.9 million yuan) account for the highest proportion, at 52.6%.

Fashion platforms are widely recognized as a blind spot in online platform research, and recently many complaints have emerged in South Korea about fashion platform companies charging too high fees . Especially in the face of the platform characteristics that most of the settled enterprises are small enterprises, the high burden of handling fees on sellers will damage the stability of the market, and these burdens may eventually be passed on to consumers.

Among the major fashion e-commerce platforms, Musinsa is the most popular fashion platform, accounting for 60.0%, followed by Half Club (16.0%), W Concept and 29CM (12.0% each).

Among the top fashion e-commerce platforms, W Concept has the highest sales commission of 28.3%, followed by 29CM at 28 % and Musinsa at 27.6%.

As of 2019, the average commission fee for online shopping malls was 13.6% , which is only half of the average 26.7% commission fee of fashion e-commerce platforms , which is indeed very low.

commission

Fashion Platform

South Korea