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Foreign sites are treasure troves of deals

U.S. is still No. 1, but Korean consumers are looking further afield
July 05,2018
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After Park Ji-hye, 30, witnessed a celebrity maintain her complexion after drinking alcohol on TV, she immediately turned to the internet to find the makeup she was using.

“I saw that the celebrity’s ears turned red after drinking alcohol, but her facial complexion was completely unchanged,” said Park. “I looked up the makeup product that she used, and it was a Thai brand. I was able to buy it directly from Thailand for half the price that it sells for in Korea.”

Choi Eun-sol, 28, recently ordered a Starbucks tumbler directly from a Taiwanese website. “I bought it because it was a unique design that can’t be found in Korea,” said Choi. “It took about a month to arrive, but it came without any dents or flaws.”

Consumers are increasingly turning to foreign websites for discounts and hard-to-find products. Direct buying by Korean consumers, which used to focus on the United States and Europe until a few years ago, is now expanding to Vietnam, Thailand and Taiwan. According to the Korea Customs Service on Wednesday, Koreans spent 2.01 billion dollars last year on 23.59 million direct overseas orders, up by 35.6 percent and 29.1 percent from 2016 - the highest it’s ever been.

Although the United States still ranks first with 56.3 percent of the total number of orders, they have declined since 2014, when U.S. orders were 73.4 percent of the total. China, Japan and Europe’s shares have risen over the same period. Other countries also saw their share of orders increase from 1.96 percent to 2.89 percent.

Koreans also order different items from different countries. Thirty-two percent of orders from the United States were for health-related items such as vitamins, while 22 percent of direct orders from China were for electronics products such as computer parts. Cosmetics and perfumes dominated orders from Europe, at 29 percent, and 18 percent of orders from Japan were for food products such as chocolates.

A popular U.S.-based website that Korean consumers use to purchase vitamins and other health supplements is iHerb.com. The website offers Korean-language services and direct delivery to Korea.

“The orders are shipped in about a week at the earliest, which is a lot faster than when you’re direct buying from most other countries,” said Kim Soo-jin, 27, who has been buying from iHerb for five years. Popular websites for direct buying in China are AliExpress and Taobao, both run by the retail giant Alibaba. Because the websites do not provide Korean language services, customers often use automatic translation tools. “The products are a great deal for the price,” said Lee Sung-jae, 45, who recently bought a monitor on Taobao, “but you have to use a shipping agency to send the package from China to Korea, and it takes a long time, which can be inconvenient.”

“As online shopping services have improved due to increased competition in each country, shopping has become borderless,” said Seo Yong-koo, a professor of management at Sookmyung Women’s University. “The characteristics of the younger generation, who have experience traveling overseas, are also reflected in shopping [preferences].”

While direct overseas shopping is fast becoming a normal part of everyday life for some, shoppers should still be careful.

The most confusing part is Korea’s tax exemption range. Tax exemptions are applied, in principle, to purchases under $150 in total value. This includes not only the price of products but also taxes, transportation fees and insurance premiums. If the amount exceeds $150 by even one dollar, the total amount is subject to customs duties. Under the Korea-U.S. Free Trade Agreement (FTA), clothing and other items purchased in the United States are tax exempt up to $200. However, when other items are included in an order, the tax exemption limit is lowered again. For example, if a person buys clothing, shoes, toys or electronics, the tax exempt amount is $200, but if there are health supplements or medicinal products in the same order, the limit is lowered to $150.

Korean consumers are also limited to just six bottles of health supplements. Customs clearance on packages will also be suspended if the supplements contain harmful ingredients, as defined by the Ministry of Food and Drug Administration. It can also be difficult to return or exchange orders, so buyers should make sure to check each site’s cancellation and exchange policy.

Shopbob, a popular U.S. fashion website that ships to Korea, does not amend or cancel orders once the order is placed.


BY KWON YOO-JIN [ebusiness@joongang.co.kr]