Why South Korea's e-commerce giants are leaving Gangnam for Seongsu

Gmarket to relocate to Seongsu in October, a five-minute walk from the subway station; ground floor to feature seller pop-up space and live-streaming studio; Musinsa saw rapid growth after moving from Apgujeong to Seongsu; Coupang Inc and SSG.com also exit Gangnam citing high rents

South Korea's major e-commerce companies are leaving Gangnam one by one — and they are all heading to Seongsu-dong.

Gmarket will move its offices to Seongsu-dong in Seongdong-gu, Seoul, in October, according to industry sources. The company has occupied four floors of Gangnam Finance Center on Teheran-ro in Gangnam-gu since 2010 — a 16-year run now coming to an end. The move is part of a rebranding strategy pursued after Gmarket was incorporated as a subsidiary of Grand Opus Holding, a joint venture established by Shinsegae Group and China's Alibaba International.

The new office building is a five-minute walk from Exit 2 of Seongsu Station on Seoul Metro Line 2, with six below-ground floors and 11 above-ground floors. Interior renovation is currently underway. In April, Gmarket CEO Jang Seung-hwan emailed employees about the move, saying it "could become a turning point that goes beyond a change in outward appearance, reshaping the way we work and our culture together."

Gmarket's choice of Seongsu reflects the area's commercial appeal. According to the Korea Tourism Organization, the number of foreign tourists who visited Yeonmujang-gil near Seongsu Station in the first quarter of this year rose 110 percent year-on-year to about 1.09 million. Annual foot traffic around Seongsu Station reached 290 million last year. The area offers opportunities to engage with both domestic and international consumers. The concentration of pop-up stores from local and global brands also makes it an attractive base for companies looking to stay ahead of trends.

Promotional activity for Musinsa's large-scale discount event "Mujinjang" along Yeonmujang-gil in Seongsu-dong, Seongdong-gu, Seoul. [Provided by Musinsa]

Gmarket is considering using the ground floor of its new office as a pop-up space to showcase products from registered sellers, and is also expected to set up a studio to support sellers' live-streaming broadcasts. As of last month, the number of registered sellers on the platform had grown 5 percent year-on-year to 660,000. The number of "profit-generating sellers" — those posting monthly sales of at least 50 million won (about $32,600) — rose 10 percent over the same period.

Musinsa is the most prominent example of a company that left Gangnam and expanded in Seongsu. The fashion e-commerce platform relocated from Apgujeong-dong in Gangnam-gu to the area near Seongsu Station in 2022, and the neighborhood has since transformed into what is known as "Musinsa Town." Along the Seongsu-dong cafe strip alone, Musinsa Megastore Seongsu, Musinsa Empty, Musinsa Standard and Musinsa Kicks are all in operation. Late last year, the company spent 329.29 million won to add "Seongsu Station (Musinsa)" as a co-branded station name.

Lower rents than Gangnam are another draw. "Seongsu has lower rents than Gangnam, and given the nature of the retail industry — where reading trends and staying close to consumers matters — it is the most attractive area," one industry official said. Coupang Inc, the top player in South Korea's e-commerce market, has also decided to leave Gangnam and Jamsil, relocating to Eastpole Tower in Guui-dong, Gwangjin-gu. SSG.com moved in February to a new office in Yeongdeungpo, where rents are more than half those at its former headquarters in Yeoksam-dong.

soho0902@heraldcorp.com