Cafe24's brand dropshipping service sees rapid growth as D2C retailers trade each other's products

A direct-to-consumer model in which brands buy and sell each other's products is gaining traction, moving beyond simple co-location on shared platforms.

Cafe24 said Monday that its brand dropshipping service, launched in February, has rapidly expanded an inter-brand distribution network within its platform.

As of August, about 3,200 stores are using the brand dropshipping service, according to Cafe24. Of those, 962 — roughly 30 percent of the total — are registered as both suppliers and sellers, meaning they list their own products for others to carry while also selling products sourced from other brands.

The service allows brands operating their own Cafe24-based storefronts to register as suppliers and list products, which other sellers can then offer in their own online shops without purchasing inventory upfront or bearing stock risk. When an order is placed, the information is forwarded to the supplier, who ships the product directly to the customer.

Suppliers gain additional distribution channels by tapping into a broad seller network, while sellers can easily expand their product offerings using other brands' merchandise. Both sides can participate without entry fees or usage charges, lowering the barrier to joining, Cafe24 said.

The seller base is also broadening. As of August, the service counts about 2,800 sellers and 1,400 suppliers — roughly a two-to-one ratio. New sign-ups are accelerating: 815 stores joined in July, surpassing the 803 that signed up in February, the month of the official launch, to set a monthly record since the service debuted.

Product connections between brands are also becoming more active. As of August, each product is listed simultaneously across an average of 4.8 stores, meaning a single item from one brand reaches consumers through roughly five different online shops at once. Since launch, the total number of supplier-product-to-seller connections has reached about 63,000.

Product categories are spreading into everyday lifestyle segments. An analysis of items sourced by sellers showed that fashion accessories (26.0 percent) and fashion apparel (23.5 percent) together accounted for 49.5 percent of the total — nearly half. They were followed by lifestyle and health (11.8 percent), baby and children's products (8.6 percent), and food (7.7 percent), all categories with steady, recurring demand.

Cafe24 said it plans to continue refining the brand dropshipping ecosystem so that product connections between brands translate more smoothly into completed sales and deliveries.

"Brand dropshipping aims to create a retail environment where D2C brands become each other's sales channels and grow together," said Kwak Hyeong-seok, head of Cafe24's commerce platform division. "We will keep expanding the inter-brand distribution ecosystem so that brands can connect their products and sales channels to create new business opportunities."