South Korea: Korean retailers jump into craze for NFTs

Nonfungible tokens, once monopolized by cryptocurrency exchanges and auction houses, are creeping into the retail industry, where top players are desperate to seek a new growth engine in a quickly saturating market.

NFTs are digital tokens of physical or digital assets, mostly of music or art, that guarantee ownership through blockchain technology.

Korean retail channels are also set to expand their footing into the burgeoning NFT business by selling art and fashion items.

CJ Olive Networks, an online retail arm of retail and entertainment giant CJ Group, announced on Jan. 25 it partnered up with local blockchain company Galaxia Metaverse to sell NFT artworks.

In a recent auction held Jan. 14, the firm sold “Cherry Blossom Ending,” a one-minute animated work by local digital artist Oh Chang-eun. With some 20 NFTs priced at 1.5 million won ($1,260) apiece, the artwork sold out in mere seconds.

In February, the firm also plans to sell another NFT painting artwork using artificial intelligence.

Lotte Home Shopping recently announced that in April it will launch an NFT marketplace.

The shopping channel plans to sell NFTs created by using its own virtual models and virtual fashion items. For instance, consumers will be able to buy both the digital version of an outfit and the actual clothes, a Lotte Home Shopping official said.

In its “Meta-Live Studio,” consumers could have a better understanding of products by putting the clothes on Lotte Home Shopping’s virtual model Lucy before purchasing them, the official added., the online shopping outlet of retail giant Shinsegae, plans to expand its NFT-based digital certification service for luxury goods.

The service, dubbed “SSG Guarantee,” will allow consumers to access the certificate through digital wallet Klip via messenger app KakaoTalk.

Unlike certificates made of paper or plastic, digital certificates are not so easily lost or accidentally destroyed, an official said. The certificate holds information such as the product’s serial number as well as the purchase and warranty period.

“Since there is high demand to resell in the luxury goods market, consumers can transfer ownership of the digital certificate through Klip as well,” the official added. “It drastically minimizes the risk of counterfeit transactions.”

Within this year, plans to launch a reselling service using SSG Guarantee for customers who purchase luxury bags or other fashion items.

Experts say retailers are turning their eyes to NFT business to gain a competitive edge in a wide open field.

“The coronavirus pandemic has accelerated online shopping but the fast delivery service, in particular, is becoming saturated by the minute. So retail giants are trying to have the upper hand in new businesses like NFTs by using their retail channels,” said Park Sung-joon, head of the Blockchain Research Center at Dongguk University.