Retailers in South Korea are adopting fandom-driven consumption as a strategy to increase their sales. Facing a decline in expenditures due to economic hardships, businesses are trying to draw in consumers with IP-based content and merchandise.

Recently, Lotte Department Store concluded a successful pop-up store event marking the second anniversary of the five-member virtual idol group PLAVE at its World Tower location in Seoul. According to Lotte’s report on March 19th, online bookings for this pop-up, which opened earlier last month, reached full capacity just two hours after they went live, with more than 25,000 individuals added to the waiting list.

To celebrate PLAVE’s two-year milestone, Lotte’s pop-up shop featured a “live photo area” for fans to snap photos with the group, screened videos, and launched 70 pieces of official commemorative merchandise, such as MMMM, which is PLAVE’s official mascot.

K-pop is becoming increasingly recognized as a significant cultural trend,” stated Yoo Do-won, who works as a buyer for the fashion accessories division at Lotte Department Store. “Our strategy involves increasing areas where both artists and enthusiasts have opportunities to interact directly with K-pop material.

Last November, Lotte Mart and Lotte Super introduced exclusive PLAVE collaborative items. On Pepero Day, which falls on November 11th, customers queued up early to buy the limited-edition PLAVE-themed Pepero—Korea’s beloved chocolate-dipped pretzels—at all Lotte Mart and Lotte Super locations across the country. In just one hour after launching, 90% of these special editions were snapped up, prompting extra manufacturing efforts to fulfill customer requests.

PLAVE, a virtual idol ensemble that burst into the scene in 2023, has amassed an international following. They have also secured a spot on Billboard’s Global 200 list. Notably, K-pop superstar G-Dragon expressed his interest in collaborating with PLAVE.

Hyundai Seoul, which manages more than 400 temporary shops annually, reported that the two most profitable pop-up events last year showcased virtual idols Isegye Idol and PLAVE. In March 2023, the retail outlet organized a succession of pop-ups with three virtual idol groups—Isegye Idol, StelLive, and PLAVE—which attracted approximately 100,000 attendees. The total revenue surpassed 7 billion won ($4.8 million). This number stands out when contrasted with typical clothing-themed pop-ups, usually earning about 1 billion won per month, as stated by a spokesperson for the firm.

More and more retailers are teaming up with virtual idols to revitalize their sales figures, which have been declining due to an extended period of economic downturn. Despite consumers cutting down on expenditures, fan-led buying remains strong and resilient against economic fluctuations.

Virtual idols provide a significant benefit for marketers because they avoid issues linked to real-life celebrities, like gossip about relationships or controversies. Fans of virtual idols tend to be big spenders too—social media sites including YouTube host numerous fan reviews detailing expenditures exceeding 200,000 won at the PLAVE pop-up shop.

Based on the 2024 report from the Korea Creative Content Agency regarding comics/webtoon users, fans of character merchandise, and music enthusiasts, there was an increase of 2.0 percentage points year-over-year in the usage rate of character-related items, reaching 95.7% last year. Additionally, the proportion of individuals who bought associated character goods climbed by 5.4 percentage points to 81.5%, highlighting the rising influence of fan cultures centered around characters.

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 sector is pouring money into IP-driven content and experiences to tackle sluggish consumer spending. According to Sweet Spot, a technology company focused on pop-up shops, over 1,713 such temporary outlets opened throughout South Korea last year. When categorized, IP-themed pop-ups made up the biggest portion at 22%, with fashion coming second at 21%, F&B taking third place at 16%, and beauty trailing slightly behind at 11%.