Have a fabulous 2012


Gaga: Rest in Peace (b.2002 - d.2010)

Thursday, March 15, 2012

Consumer Goods in Korea Most Expensive in the World

Sale: the price of Korean beef here in his photo is almost 49USD per kilo at E.Mart and people swarms in to buy it...

According to Consumers Korea (CK), consumer goods in Korea are the most expensive in the world. The detailed article is HERE at Chosun Ilbo which is supportive of my argument in this post on: how to do student friendly (on budget) shopping in Seoul?

According to CK:

"...retail prices of 48 items from electronics to food in Korea were higher than in any of the 17 countries surveyed. The countries included the U.S., the U.K., Japan, China, India and the Philippines."

The idea revolves around the fact that Korean made goods are often cheaper abroad than in Korea. Some of the interesting examples include Korean TVs which are sold at home for almost twice its price if bought in China. Samsung's 46-inch LED TV D6400 is priced at W2.91 million (US$1=W1,121) in Korea but in the US it its price is 2.16 million won which means almost 800USD extra if you buy it in Korea BUTin China the price is W1.72 million.

If we look at smartphones which are the most popular gadget and almost everybody including school children have it is pricier in Korea. Samsung's Nexus S is sold for W700,000 in Korea, but W630,000 in the U.S, almost 70 USD more than the US. :-(

The reason Samsung and LG can get away with exorbitant prices in Korea is that they occupy over 95 percent of the market share. LG claims that goods sold in the Korean market have higher prime costs because the materials used are superior and the price includes delivery and installation costs...really??? I paid extra 70USD for the delivery of our fridge, though.

Other products include: jeans, shampoo, beer and sun screen. A pair of Levi's 501 jeans cost W168,000 in Korea, second only to W195,585 in Japan. The same jeans cost W71,394 in the U.S but I bought Levi's 501 for 45 USD in Philadelphia.

Another interesting product is beef.  Australian beef sirloin, is sold at W49,800 per kilo, the second most expensive followed by Japan. These are still good times that beef is sold for 50USD per kilo but we have seen times when it was over 150USD. If the beef is Korean, you can find price tags as high as 700 USD per kilo of certain beef portions. Especially during Chuseok and Seolnal.

Accroding to Consumers Korea:  "The reason for the high price of imported beef is the unreasonable logistics and distribution structure where middlemen take a huge profit."

FTAs and opening of the Korean markets have surely brought prices down compared to what they were 10 years ago. Apart from CKs research, we all know that Korean people are willing to pay extra money for "kook-nay-san" (국내산) meaning made in Korea products. Kook-nay-san is the best in the world - you will get to hear it from every single Korean person. That is how it should be for other nations and their products but then we must not be beating the bush about free market economies.