Koreans Buy Samsung TVs on Amazon Hurting Local Shops Yahoo Finance — Volkswagen Polo Lim

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Volkswagen Polo Lim

Koreans Buy Samsung TVs on Amazon, Local Shops

When office worker Lim Ji Han wanted a made by homegrown Samsung Co. (005930). he had Amazon.com Inc. ship it halfway around the rather than walking to a store.

The two-week wait him more than $600.

Lim is one of Korea’s jicgoojok — tribe of direct buyers challenging local retailers who long used their status to charge prices as as nine times higher overseas Web stores. International offered by foreign companies, as Seattle-based Amazon and Gap Inc. is giving Korean consumers a and forcing brick-and-mortar sellers to cut

Word is spreading online that products can be bought cheaper abroad and people are about product-specific shopping boasting about how much saved, said Gene a retail analyst at Woori Securities Co. in Seoul. Consumers who to think of jicgoo as a complicated are giving it a shot after that the price difference is

For decades, South Korea’s have enjoyed agreements manufacturers that allow to charge a premium for foreign and products with little about competition. Overseas cut exclusive deals with partners to get a quick start in said Lee Hay Lim, an economist consumption trends at LG Economic Institute in Seoul.


Consumer Savings

The national began an effort to spur from abroad after about price gaps for goods. Startups have sprung up, offering to ship from overseas at a discount.

offered by direct buying more than make up for duties, shipping fees and times.

Why should I pay more for the or a very similar, product? Lim

Housewife Han Ji Won said she also it easier to ignore brick-and-mortar and shop online. Han, 34, from Gap’s U.S. pays shipping fees and charges, and waits a couple of for her clothes. That’s preferable to the prices at local stores, she

Jicgoo saves me about 30 compared with shopping at Gap in Korea , Han said in an interview in south of Seoul, where she I don’t mind the delivery

Gap, Chloe

Data that the direct-buying trend is in Korea. Overseas credit-card grew 15.4 percent in outpacing a local increase of 3.2 according to the Bank of Korea. through e-commerce sites 47 percent to about $1 billion in according to the Korea Customs

Under the traditional system, from San Francisco-based Gap are shipped to an affiliate of Shinsegae Co. the nation’s department-store group.

Likewise, clothing made by San Francisco-based Corp. is sold to Lotte Co. of Seoul. Cie. Financiere SA’s Chloe fashion is some 20 brands that can be imported through Handsome Co. an of Hyundai Department Store Co.

Shinsegae, Lotte and Hyundai accounted for 83 percent of department sales in 2011, according to the figures from the Korea Trade Commission. Shares of the three biggest department have slumped this

Survival Issue

This is a issue, said Woori Park. The exclusive import held over many store brands will be all gone with prices of about everything expected to he said.

Critics of the system now the government, which said on 9 that it will encourage imports by major outlets to competition and stabilize consumer of import goods. Finance Hyun Oh Seok said imports sold through dealerships are excessively expensive, News reported on April 1.

Ten imported consumer items, wine, lipstick, cheese and car were 2.7 times to 9.2 times expensive locally than the Korea Customs Office has

Operating profit margins for are close to zero, but some retailers still maintain margins, said Lee, of LG

Malltail’s Growth

Shares of Shopping, which controls 45 of the market, have dropped 21 this year. Hyundai Store shares retreated 17 while Shinsegae (004170) 10 percent. Shinsegae International Co. the affiliate with an exclusive with Gap, has slumped 18

Revenue at the three fell four sale seasons year even as brands as Polo Ralph Lauren cut by as much as 40 percent, trade data show.

By contrast, catering to Korea’s direct-buyers are growth, including firms offer U.S. delivery to circumvent manufacturers’ and retailers’ rules. Some, including also test televisions in the before repackaging them for to Korea.

Malltail saw a 13-fold increase to 26 billion won between and 2013, according to the company.

Choices

Korean consumers are smart, and want more said Choi Seung an agent at Malltail.com. We’re facilitating the process and reducing the risk.

To get his 55-inch LED television to his home in Seoul’s Songpa Lim used the Korean website The site redirected the shipment Amazon, whose website allow products made by or LG Electronics to be shipped to Korea.

Lim said he paid about including taxes, insurance and which took two weeks. on specifications, the same model in Korea for about 2 million won or $1,900 at the time.

Samsung and LG higher local prices delivery and installation, and reflect factors such as tax rates.

The we provide in each country are for specific conditions in each such as market demand and Samsung said in an e-mailed

Black Hole

Lotte (023530). Hyundai Department and Shinsegae declined to comment on pricing policies.

The jicgoojok are more competition, Baek Un head of the Korea Customs said in an interview. More and stores will be pushed to cut Supply chains will be Marketing margins will be

Global Internet companies are eyeing the market as the power of big retailers erodes. Amazon to open a South Korean this year, the Chosun newspaper reported in January, industry officials it didn’t Mary Osako, a spokeswoman for didn’t return a call for

For shoppers like Han, the of direct-buying is unlikely to wane. She she now makes about 70 percent of her from overseas websites.

is just a black hole once you start doing it, you stop, she said. Why would

To contact the reporter on this Cynthia Kim in Seoul at ckim170@bloomberg.net

To the editors responsible for this Stephanie Wong at swong139@bloomberg.net Majendie, Stuart Biggs

from Bloomberg.com

Interesting



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