<Shopping at Namdaemun Market>
Well, I agree with you about the prices, but I don't know about the fun part.
-What do you mean?
-It's always crowded there.
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In the last sentence, what does 'it' refer to?
The conversation is fine.
"It" in the 3rd sentence is one of those that is referring to the atmosphere or situation or surroundings in general, in this case probably the atmosphere of the store.