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| Choi Jae-hwa, CEO of Bungaejangter / Courtesy of Bungaejangter |
Bungae Pay ensures safe, convenient transactions between users
By Baek Byung-yeul
Korea's online secondhand market started with Joonggonara and Danggeun Market, which both focus on trading among neighbors in the same town, has become increasingly popular. However, Bungaejangter, which started its service in 2011, also has been widely used as one of the most popular secondhand trading platforms here, with many users especially trading fashion items.
As the first secondhand trading platform to introduce a mobile app, Bungaejangter is differentiated from other service platform providers by actively utilizing digital technology to make secondhand trading safer and easier for users, according to its CEO.
"Our mission is to provide a stress-free secondhand trading experience. Buying and selling secondhand goods should be safe and easy," Choi Jae-wha, CEO of Bungaejangter, told The Korea Times during a recent interview at the company's office in Seoul.
"Under the vision, Bungaejangter has been operating a secure payment service called Bungae Pay since 2018. Secondhand transactions involve sending money to each other without ever seeing each other. To ensure a safe transaction, Bungaejangter holds the money and the seller receives the money when the consumer receives the item from the seller and confirms the purchase," she said.
"Bungae Pay is our most successful business model. Since its launch in 2018, it has been continuously evolving to eliminate fraud and ensure safe secondhand transactions. Through this service, we are creating awareness among consumers that the secondhand market is a safe and convenient transaction market," she further mentioned.
Bungae Pay has recorded about 1.1 trillion won ($820 million) in cumulative transactions as of April 2023. The service's reuse rate is at 63 percent, and the total number of users of this service is 1.85 million, the company said.
In addition to Bungae Pay, Bungaejangter launched a service called Bungae Care in 2022, which the company says has significantly increased the usage of Bungae Pay. Bungae Care is a service that allows Bungaejangter to sell used products of certain fashion brands by completing authenticity checks, cleaning services as well as functional checks on IT devices. If the product is found to be fake, Bungaejangter will compensate 300 percent of the purchase price.
"There are a lot of cases where you think it's genuine, but it's actually fake. To prevent people from being scammed when buying secondhand goods, we thought we should verify the authenticity ourselves, so we launched Bungae Care service last year. Since then, the number of scams has decreased tremendously," Choi said.
The CEO said that secondhand trading is a way to give everything a second life in a world where everything changes so quickly.
"Every year there are new trends in the market, but there is no proper resale route. After the first sale, these goods don't have ways to be valued again and we want to solve this problem. We want to give value to everything in the world. It is the essence of secondhand trading and in order to do that, we need to build a secure platform," she said.
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| A series of phone displays showing the evolution of Bungaejangter's digital platform for trading used goods. Courtesy of Bungaejangter |
'Secondhand market just got started'
Choi said the secondhand market in Korea is only at its early stage with more growth potential. In particular, she sees even more potential for growth in the fashion trade market, which is similar to the automotive market where new and used car markets coexist.
"I think the secondhand market is a blossoming market. This market competes with other markets selling new goods, especially fashion items. I bought a Moncler coat on Bungaejangter last year, and it's a good quality product, so there's no reason to go to a department store. Some users even use secondhand platforms to buy models that were released in the past. I don't think we should buy everything secondhand, but if we buy 10 products and buy one or two items secondhand, this market will become another huge one," the CEO said.
"The more expensive the car, the less it depreciates on the used car market, and the same logic applies to used fashion items, so some users buy expensive clothes, use them enough and then sell them on Bungaejangter at a reasonable price. The approach to consumption is changing. This different approach to consumption is largely driven by the younger generation, who are more familiar with online technology and have used Bungaejangter to trade fashion items, which is why our platform has become a popular platform for fashion trading," she added.
Choi joined the company as chief marketing executive but was appointed CEO in June last year. When asked about her accomplishments as CEO over the past year, Choi said she has tried to improve efficiency and create an atmosphere where employees are excited to work.
"I took over in June last year. I can't say that I've done everything well since then. I think I am still in the process of producing fruitful results. The satisfying part of being CEO of Bungaejangter is that the management and employees are on the same page about where we want to take the company," Choi said.
"On the management side, we've cleaned up some inefficiencies. We're a technology-driven company, so we've invested in technology. A lot of our users use our platform to trade secondhand fashion items, and we've been focusing a lot on the fashion item trading process to make it easier for them," she added.
As uncertainty about the global economy grows, investment in startups is also decreasing. It is not uncommon for startups with outstanding technology and groundbreaking business ideas to be forced to shut down due to lack of investment, but the CEO said that Bungaejangter's business is stable for now.
"Thankfully, Bungaejangter is doing well. In 2021, the company attracted an investment of around 80 billion won. Since then, we've done enough to improve the company's financial health. We could have gotten more funding to run the company, but for now, we are able to take on various challenges with the funds we have," the CEO said.
As Choi said, Bungaejangter received 56 billion won in investment in April 2020 and attracted new investment of 82 billion won in the first quarter of 2022 once again, being recognized for its market dominance and growth potential.
