At the foot of the stairs leading to the fifth floor of Seoul's Dongdaemun General Market on the 22nd, shoppers waiting to enter the floor of accessory-parts wholesalers stood in a long line. Three safety marshals were on hand to manage the crowd. The kind of entry control usually seen outside luxury boutiques in department stores was in place at a market known among Generation Z as a mecca for do-it-yourself decoration, from keyboard keyrings and smartphone cases to jelly shoes, necklaces and bracelets.
Inside, the fifth floor was packed. Families with young children, women in their 20s with friends, couples and foreign tourists filled the aisles. Far from a fading traditional market, it looked like one of the hottest shopping destinations in Seoul. A clerk at one store said the crowds are this large every weekend and that customer traffic has grown noticeably since the COVID-19 pandemic.
The appeal lies in low prices and making things yourself. At one store in Building B, an LED four-key keyboard keyring base sold for 3,000 won, with key caps priced at 200 to 400 won. A keyring that costs about 20,000 won at retail bookstores can be assembled for 5,000 won. One couple spent a long time picking and assembling parts before paying 102,000 won. No matter how crowded the store gets, customers are free to handle and try out the parts. One store owner said some customers assemble items and leave without buying, but that is fine because the fun is what brings them in.
The Buying Process Itself Becomes Economic Value
The popularity of Dongdaemun General Market is one facet of a shift driven by the spread of experience-based consumption. An analysis of Seoul's de facto population data showed that the average daytime population — between 11 a.m. and 5 p.m. — in Changsin 1-dong, home to the market as well as toy and footwear arcades, rose 10.0% to 9,414 in June this year from 8,558 in June last year. Numbers fell across the 40s, 50s and 60s age brackets, but teenagers surged 82.1% to 590 from 324, and people in their 20s rose 53.7% to 1,826 from 1,188.
Experts define the rising value of experience in the marketplace as the experience economy, a concept established in 1999 by Joseph Pine and James Gilmore, co-founders of the consulting firm Strategic Horizons. Their theory holds that the primary unit of economic value creation evolves from goods to services and then to experiences, and that the very process by which consumers buy goods and services carries independent economic value. An early success case was the "Starbucks experience," which allowed coffee made from a few hundred won worth of beans to be sold for thousands of won.
The trend extends beyond South Korea. It has grown stronger in an era of active social media. In a report published last year tracking a decade of changes in British consumer spending, the global investment bank Barclays said that 63% of consumers prefer talking about experiences over the things they buy, and that the experience economy has become a lifestyle in which consumers open their wallets for emotional satisfaction.
Generation Z is by far the driving force behind the current experience economy. According to Sweetspot, a company specializing in pop-up stores, 72% of visitors to domestic pop-up stores in the first half of this year were in their 20s. Analysts say the more digitally native a generation is, the more novel analog experiences of seeing, hearing, touching and feeling become. The link with social media usage also draws attention. Kim Yong-sub, head of the Sharp Imagination Lab, said sharing tastes on social media is part of daily life for Generation Z, and that content worth sharing is grounded in experience — visiting events and venues and trying out brands.
1,000 Spots for a Mall Run Fill in 10 Minutes
Signs of the experience economy are appearing across the market. When Starfield Suwon announced a 10-kilometer running event through the empty mall before opening hours on the 30th of this month, its 1,000 spots filled within 10 minutes of registration opening. Organizers had initially planned to accept entries over a month but closed registration the same day. An official at Shinsegae Property said participants appeared to find it entertaining that they could experience Starfield, where they usually shop and dine, as a running course, adding that the company had not expected consumer interest in new experiences to run this high.
When Lotte Department Store turned the Lotte Town area of Myeong-dong in Seoul into an experience venue themed on everyday Korean life, with features such as a traditional medicine clinic and a sauna, in May, visitors reached 14,000 over 10 days. Food and beverage sales at Lotte Department Store's main branch rose 30% from a year earlier. Sales of Korean fashion brands doubled.
Korean industry is embracing the shift wholesale. The Hyundai Seoul, Yongsan I'Park Mall and Lotte Department Store's main branch each hosted hundreds of pop-up stores in the first half of this year alone, positioning themselves as playgrounds of experience for Generation Z. Everland, an experience-economy platform by nature, is adding a monthly "in-season" content series in response to surging Generation Z demand for novel experiences, aiming to offer new activities each month such as family football training camps and gimbap-rolling events. E-Mart will convert at least six stores this year into mall-type outlets with stronger dwell-time features such as family dining, reading and leisure. Sales at its Kintex store, renovated last year, jumped 74.0% from before the reopening.
Brands are also changing how they sell. Activities that let consumers form an impression of a brand or product through experience before making a purchase decision have become a marketing formula. ONE THING, a skincare brand under Aekyung Industrial, partnered with the Woojuyeon Korean medicine clinic in Seoul's Bukchon to build a temporary experience space for brand trials. Mercedes-Benz is running a long-term pop-up store in Seoul's Seongsu-dong from May through February next year. More than a simple vehicle showroom, the space displays classic cars from each era, starting with the Patent Motorwagen, the world's first internal combustion engine automobile, to convey the brand's heritage.
Kim Eun-mi, chief marketing officer and head of the data marketing division at Sweetspot, said that among companies opening pop-up stores or experience exhibitions in Seoul recently are not only new brands but also enduring ones such as Nongshim's Shin Ramyun, Hermès and Mercedes-Benz. Many companies now understand that they must reach Generation Z to carry their past success forward, she said, and that the key is hands-on experience.
