“Charan” will clean up the closet and sell it. Just put it in front of the door.”
On the 2nd, Charan Fulfillment Center in Namyangju-si, Gyeonggi-do. On one side of the 4099-square-meter (1240 square meter) logistics center, light purple “charan bags” containing used clothing were piled up like mountains. Clothes collected from customers are first inspected and sorted, then reborn to a new product level through high-temperature steam disinfection, washing, ironing, repair, and fragrance treatment.
70,000 pieces of clothing with this quality guarantee were tightly hung on the hangers in the center. Kim Hye-sung, CEO of Mines, explained, “From a consumer's point of view, it's troublesome to sell clothes directly even when clothes they don't wear are piled up,” and “Charan is a 'complete agency' model that takes care of everything from collection to inspection, cleaning, photography, and sales.”
— “The real problems with second-hand trading are annoyance and quality anxiety”
CEO Kim aimed to resolve “consumer anxiety” in the second-hand fashion market. Used products often differ in actual condition and description, so there is a big problem of lack of trust. The process of verifying this is also cumbersome. The buyer must communicate with the seller several times to request photos and information, and the seller must also take and explain the transaction himself. The service created to resolve this inconvenience is the fashion e-commerce company “Charan.”
Charan sells branded clothing on consignment from clothing collected from customers, and buys uninspected products and non-branded (bonded) products in kg units and distributes them through subsidiaries. For customers who want to buy second-hand clothing, they sell it at a 70-80% discount compared to the regular price. The average customer unit price for buyers is 70,000 won, and the purchase quantity is 2.2 pieces.
— Explosive growth... Next year's target is 10 billion monthly transactions
Services are growing rapidly. The monthly transaction amount jumped from 7 million won at the beginning of launch in August 2023 to 2 billion won in 2 years and 4 months. Next year's monthly transaction target is 10 billion won. The growth engine is 'fulfillment-based quality assurance'. All products are inspected and cleaned, and a refund is guaranteed in case of defects. Mr. Kim said, “After all, the barrier to buying used goods is 'defect anxiety',” and “eliminating quality risk is the essence of 'charan.'”
Mr. Kim assessed that the potential of the second-hand fashion market would be much greater. He said, “Even if only 20% of the fashion market worth 40 trillion to 50 trillion won per year is converted to second-hand, it becomes an 8 trillion to 10 trillion won market.” The goal is to turn consumers who only bought new clothes into “second-hand experience customers.”
Attracting investment also continued. This year, we secured 15.4 billion won (cumulative approximately 30 billion won) from Hashed and Altos Ventures, etc., and most of the investment funds were invested in fulfillment expansion.
━Charan category is also expanding... “I dream of popularizing fashion e-commerce”
Kim also emphasized customer experience innovation. He said, “Direct transaction coordination, packaging, and refund negotiations create emotional exhaustion,” and predicted that “doorstep collection and clear refund standards will become common in the future.” “The second-hand trading experience should be as convenient as regular e-commerce.” Kim then said, “Within the next 3 to 5 years, the number of players will increase rapidly and the market will grow 2 to 3 times a year.”
Charan plans to expand the category to include men, infants, and shoes next year. Mr. Kim said, “The goal is to exponentially increase the number of items handled and grow the transaction amount by 5 times, away from the traditional form of selling only women's fashion and miscellaneous goods,” and “I want to create an environment where 1 out of 3 people take used clothing as a matter of course when buying clothes.”
