Retailers in South Korea are turning to fandom-driven consumption to boost sales. With spending declining amid an economic downturn, companies are attempting to attract customers through intellectual property (IP)--based content and products.
Lotte Department Store recently wrapped up a successful pop-up store event celebrating the second anniversary of the five-member virtual idol group PLAVE at its World Tower branch in Seoul. Online reservations for the pop-up, held last month before its launch, were fully booked within two hours, with over 25,000 people on the waitlist, according to Lotte on March 19.
To mark PLAVE’s second anniversary, Lotte’s pop-up store set up a “live photo zone” where fans could take pictures with the group, offered video screenings, and released 70 official anniversary merchandise items, including MMMM, PLAVE’s official character.
“K-pop is gaining traction as a cultural phenomenon,” said Yoo Do-won, a buyer in the fashion accessories team at Lotte Department Store. “We plan to expand spaces where artists and fans can connect and engage with K-pop content.”
Lotte Mart and Lotte Super also launched exclusive PLAVE collaboration products last November. Customers lined up early to purchase limited edition PLAVE-themed Pepero, popular chocolate-covered pretzel sticks in Korea, at Lotte Mart and Lotte Super stores nationwide on Pepero Day, or Nov. 11. Within just an hour of the launch, 90% of the products had been sold out, leading to additional production runs to meet demand.
PLAVE, a virtual idol group that debuted in 2023, has garnered a global fanbase. The group even made it onto Billboard’s Global 200 chart. K-pop icon G-Dragon recently named them a group he would like to collaborate with.
The Hyundai Seoul, which operates over 400 pop-up stores a year, said that the top two highest-grossing pop-ups last year featured virtual idols Isegye Idol and PLAVE. In March 2023, the department store hosted a series of pop-ups featuring three virtual idol groups—Isegye Idol, StelLive, and PLAVE—drawing around 100,000 visitors. Sales exceeded 7 billion won ($4.8 million), an impressive figure compared to fashion pop-ups, which typically generate around 1 billion won in monthly sales, said a company representative.
Retailers are increasingly collaborating with virtual idols to boost sales, which have been dwindling amid a prolonged economic slump. Even as consumers cut back on spending, fandom-driven purchases remain robust, largely unaffected by the economy.
Virtual idols offer a distinct advantage for advertisers as they eliminate risks associated with real-world celebrity problems such as relationship rumors or scandals. Virtual idol fans also spend more - social media platforms such as YouTube are filled with reviews from fans who spent over 200,000 won on merchandise at the PLAVE pop-up store.
According to the Korea Creative Content Agency’s 2024 report on comics/webtoon users, character merchandise consumers, and music consumers, the percentage of those who have used character-related products rose 2.0 percentage points year-on-year to 95.7% last year. The percentage of consumers who have purchased related character merchandise increased 5.4 percentage points to 81.5%, reflecting the growing appeal of character-driven fandom culture.
During the same period, the retail sales index, which measures consumer spending at retail stores like supermarkets, convenience stores, and others, fell by 2.2% year-on-year.
The retail industry is investing in IP-based content and events to address weak spending. Sweet Spot, a retail tech firm specializing in pop-up stores, reported that 1,713 pop-ups were launched across Korea last year. By category, IP-based pop-ups accounted for the largest share (22%), followed by fashion (21%), food and beverage (16%), and beauty (11%).
