Thanksgiving deals hit South Korea

By Youkyung Lee, AP

SEOUL–South Korea does not celebrate Thanksgiving, but the hot deals at U.S. online retailers during the holiday season are changing the shopping habits of South Koreans who are aggrieved at marked-up prices of locally made and imported goods at hometown stores.

The volume of goods ordered by Korean shoppers from websites overseas has surged in recent years and sales are forecast to set a record high this year above $1 billion. It remains small compared with retail sales within South Korea, which are forecast at $243 billion this year, but is expanding at a faster rate.

The trend known as ��jikgoo�� in local lingo has forced South Korean retailers to cut prices during the weekend between Black Friday and Cyber Monday to get those shoppers back. LG Electronics Inc. changed its customer service policy in April so that Koreans who buy LG televisions from outside Korea would not be discriminated against in customer service.

Seeing the ��jikgoo�� trend as a way to lower excessive prices of imported goods, the government is also trying to help these online shoppers. This summer, the Korea Customs Service expanded the list of items that are exempted from the lengthy procedures for registering imported goods.

Those responses show how online commerce is putting traditional bricks and mortar retailing on the back foot in many countries by making it easier for people to compare prices and work out when local chains are gouging them.

Asia has its own online retailers but U.S. companies are also targeting the region, with recently committing US$2 billion to expanding its Indian business. In China, e-commerce giant Alibaba Group and Amazon also promoted Black Friday sales but results appeared to be modest. The day was overshadowed by China’s, and possibly the world’s, busiest retailing day �X ��Singles Day,�� on Nov. 11.

South Korean shoppers complain that foreign goods sold at local retailers are marked up and the local market lacks diversity because importers tend to bring in premium goods only, not budget models. Wider choice and cheaper prices are among the reasons why Korean shoppers go to Amazon and eBay to get products made by Korean companies.

The value of goods purchased by South Koreans directly from websites overseas surged six times from 2009 to US$1.04 billion in 2013. During the first 10 months of 2014, South Koreans exceeded the 2013 figure with purchases of US$1.23 billion, according to South Korea’s customs office. U.S. websites are the most popular among South Korean online shoppers, followed by China, Germany and Hong Kong.

Consumers say the prices overseas are often cheaper, even after paying tariffs and value added taxes, which are about 20 percent for most products and 26 percent for a large-size television.

Businesses that help Korean consumers navigate U.S. websites and offer shipping are also booming.