Interior startups that thrived during the COVID-19 pandemic are now shutting down one after another due to changes in consumer trends and weakened competitiveness in the post-endemic phase. Following 'Allets,' 'House App,' and 'Mungori.com,' 'Jipggumigi' also ended its services recently.
As startups face a harsh investment climate and stand at a crossroads for survival, evaluations indicate that only certain platforms, such as Ohouse and Apartmentmentary, which have focused on business diversification and cultural change, have survived.
According to industry sources on the 1st, the interior platform 'Jipggumigi' ended its services on the 31st of last month, marking the end after 13 years since its establishment in 2012. It started as a platform for users to share interior information and grew into a platform selling furniture, appliances, and accessories. However, sales plummeted from 12.4 billion won in 2019 to 870 million won in 2023. It was acquired in 2022 by the fashion commerce brand 'Brandi,' but ownership changed to a company that operates the laundry service 'Lundrigo' in 2023, ultimately leading to the discontinuation of services just over a year after the acquisition.
'Mungori.com,' an online mall specializing in interior materials, was declared bankrupt last year. Starting as a hardware store in 2002, it rode the wave of the DIY interior trend and grew into a specialized shopping mall selling various interior materials. In 2019, Taeyoung Group purchased 60% of Mungori.com's shares for 15 billion won. However, as annual deficits continued to rise, the debt ratio skyrocketed to 411.8% in 2023. TY Holdings stated at the time, "We filed for bankruptcy due to the industry recession and prolonged economic downturn."
The lifestyle review platform 'House App' also suspended its services in February 2023. House Media, which operates House App, noted that it was difficult to pay settlement amounts to partners and creators due to worsening capital liquidity. The shopping mall 'Allets,' which sold interior lighting and furniture, also closed its doors in August of last year.
Industry insiders cite changes in consumer trends as one of the main reasons for the sequential failures of interior startups. Although interest in improving indoor spaces grew during the COVID-19 period, the focus of consumer spending shifted to dining out and travel as the environment transitioned to endemic, leading to a contraction in the market.
They also fell short in competition with large e-commerce companies. Large online malls like Coupang and 11Street began offering the same products at lower prices. AliExpress and Temu also rapidly infiltrated the relevant market with ultra-low-price strategies.
In contrast, Ohouse, the top player in the industry, continues to maintain its growth trend. Last year, it recorded sales of 287.9 billion won, an operating profit of 570 million won, and a net profit of 5.26 billion won, achieving its first annual profit in its 10 years since its establishment in 2014.
Ohouse has been recognized for successfully differentiating itself through community operations based on content and the expansion of product categories. In November of last year, it launched its own furniture brand 'RAY.' Some platforms, including Apartmentmentary, are still operational.
According to the Startup Alliance, the number of investments in domestic startups and small and medium-sized enterprises last year was 1,336, a 27% decrease from the previous year (1,838).
An industry insider remarked, "As long-term recession led to a harsh investment climate, startups find themselves at a crossroads for survival, and they must secure loyal customers through specialized services. Only a few platforms with differentiated services and content will survive."