"Raise the Commission or Not"... Zero Revenue Model Resell Platform Eyes Game

Resale Platform Struggles with Introducing Fees... Difficulty Securing Revenue Model
Free Shipping Policy Ending This Month... Industry Calls It a "Natural Step"
Cream Expected to Surpass 1 Trillion KRW in Transactions This Year... MAU Three Times SoldOut's

Showroom of the resale platform 'Kream' located in Mapo-gu, Seoul. [Photo by Kream]

[Asia Economy Reporter Lee Junhyung] Resell platforms have been grappling with the introduction of transaction fees. Major domestic resell platforms have maintained a ‘zero (0) fee’ policy until recently as market competition intensified. However, facing difficulties in securing revenue models, they are now seriously considering implementing transaction fees. Starting as early as next year, the resell industry is expected to see the introduction of fees, beginning with ‘KREAM,’ the number one sneakers resell platform.

According to industry sources on the 14th, KREAM is reviewing plans to introduce transaction fees as early as next year. Since launching its service in March last year, KREAM has applied a ‘0% fee’ policy on all transactions within its application. Resell platform transactions involve sellers sending sneakers or other products to an inspection center, and upon passing inspection, the items are delivered to buyers, with costs settled accordingly. The global leading resell platform, StockX, applies an 8-10% fee during this process. A KREAM representative stated, “Due to the revenue structure, it is not feasible to maintain a 0% fee policy indefinitely,” adding, “We are keeping the possibility of introducing fees open and are carefully reviewing it internally.”

Originally, KREAM planned to maintain the zero-fee policy for about three months after launching the service. However, when the online platform Musinsa announced the launch of its sneakers resell platform ‘Soldout,’ KREAM extended the zero-fee policy indefinitely. This was due to the emergence of strong competitors backed by unicorn company Musinsa (a private company valued at over 1 trillion KRW), such as Frog and Out of Stock, intensifying market competition. Soldout also followed KREAM’s lead by adopting a zero-fee policy.

The resale platform Cream has applied a '0% commission fee' to all transactions within the application (app) since its service launch in March last year.
[Photo by Cream app capture]

End of Free Shipping Marks ‘Starting Signal’

To improve its revenue structure, KREAM recently abolished its free shipping policy. Until last month, KREAM covered all shipping costs incurred in delivering inspected products to buyers. However, the policy was changed last month, and from the 1st of this month, a shipping fee of 1,000 KRW per purchased item has been charged. Considering that free shipping was one of the main benefits KREAM offered to expand its user base, industry consensus views this as a clear signal of the impending introduction of transaction fees.

The industry regards KREAM’s move to introduce transaction fees as a “natural step.” Major resell platforms like KREAM and Soldout have maintained zero-fee policies to secure market dominance, but continuing this approach is seen as unsustainable. In fact, the industry estimates that KREAM has been incurring losses of 300 to 500 million KRW monthly to maintain its zero-fee service. An industry insider explained, “Before KREAM’s launch, resell platform fees were typically around 10%. Since KREAM’s zero-fee policy began, cutthroat competition has intensified, causing deep concerns among companies.”

Unicorn (unlisted company with a corporate value of over 1 trillion won) Musinsa's resale platform 'Soldout.'
Photo by Musinsa

Transaction Volume Expected to Surpass 1 Trillion KRW This Year

Analysts also note that KREAM’s stable position as the number one player in the domestic market is a contributing factor. KREAM’s user base far exceeds that of its competitors. According to big data analytics solution Mobile Index, KREAM’s monthly active users (MAU) in October this year reached 587,867, more than three times the 166,506 MAU of market runner-up Soldout.

Transaction volume within the platform is also on the rise. Since launching its service last year, KREAM has recorded a cumulative transaction volume of 270 billion KRW. According to KREAM, the cumulative transaction volume from January to November this year has increased more than fivefold compared to the same period last year. The cumulative transaction volume is expected to surpass 1 trillion KRW this year. Arithmetically, if a 10% fee rate is introduced, the company would instantly grow into a business with annual sales of around 100 billion KRW.

If KREAM begins collecting fees, it is anticipated that competitors like Soldout will follow suit. However, KREAM remains cautious about specifying the timing of fee introduction. This is partly due to recent negative developments, such as the Fair Trade Commission’s criticism last month of unfair terms in resell platforms. Concerns have been consistently raised about consumer harm caused by certain clauses in resell platforms, such as prohibitions on refunds and exchanges. The Fair Trade Commission has taken corrective actions against clauses involving excessive restrictions on withdrawal of subscription, unilateral fee adjustments, and excessive company indemnity.

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