Buying online from foreign sellers is one of hottest trends among young South Koreans at the moment, with last year’s total purchase reaching one trillion Korean won [ko] (about 0.9 billion US dollars). Making web purchases allows shoppers to get their hands on products not available in the country or products from Korean brands but at much cheaper prices.

But the trend has now drawn ire from the Korean government, which recently proposed a bill that would blacklist [ko] Koreans whose quarterly international purchases made via credit card exceeds 5,000 US dollars as an effort to protect the local economy.

There are three major ways [ko] that young Koreans are buying from abroad online. First, small agencies or brokers take care of the purchasing process normally for a 10 percent service fee on transactions. Second, small businesses and individuals let customers use their US address and they only handle shipping.

Third, customers buy products through the international sellers’ websites using their Korean address. It is this third type of purchase, known in Korean as “Haeoi-jikgu” (translation: “direct oversees purchase”) is what is rapidly gaining traction in the country. This means they have to pay the expensive shipping prices of sites like Amazon, eBay and Drugstore.com, yet the total usually comes out cheaper than buying the product from domestic vendors.

Korean online communities have even opened up new sub-categories dedicated to this type of purchase, where online users can share tips about how to buy, what things to be aware of and how to avoid making mistakes.

Economic Review blog explains this new phenomena [ko] in an in-depth post entitled “What is the reason behind direct oversees purchases? Is it merely over-consuption OR a customer riot?”

When reading Korean news reports, many merely make statements such as “making oversees purchases is bad”. But these sort of oversees purchases will only increase, naturally, as globalization and technology progress. Companies are breaking economic barriers via WTO (World Trade Organization) and FTA (Free Trade Agreement), and laborers are too moving around for work, crossing borders, looking for places where there is a need for labor, although these are done much more passively. Customers, just like anyone else, should be allowed to make reasonable economic decisions for themselves. If the local producers and importers are selling the same product at a higher price in the local Korean market, [Korean] customers in response should be able to try to pay lowest price available by making oversees purchase. […] Banning oversees sales in order to boost local sales is equivalent to “not hiring female interns in order to solve sexual harassment issues involving government officials”. It is especially true in the current situation of Korean brands selling their TVs at half price on Amazon, thus making Korean customers their doormats.

Angry comment flooded the Korean web in reaction to the news of the government’s desire to restrict Koreans’ economic activities.

PPSS blog aggregated some of the best tweets [ko], and several of them are listed below. Most of them have been retweeted hundreds of times:

 

As you can see from this [referring to the screen capture above which shows the exact same smart TV priced about four times higher in Korea], the Korean people have became companies’ doormats, but the government still claims that in order to boost sales at home, they will take measures to stem direct oversees purchases.

 

Those people use to say “you recent college graduates, this world is a highly competitive world, so unless you make yourself competent enough to win international competitions, we will not hire you.” Now they say “Please, dear customers. We can’t win over international retailers. Will you reconsider making purchases from oversees sellers?” Seriously, can this be real?

 

Are you aware of the fact that the import of foreign snacks was not allowed? Chocolate Kisses used to be a rare item given to only few people as a gift from those who had traveled to the United States. Do you want to return to that time? Please drop it. If you don’t want customers to use international retailers, then improve your quality or just stop pawning off low-quality brands as high-quality ones.

 

The government never tries to find the main reason from within the distribution network. I think the problem here is that the Korean people have finally found out what Korean retailers have been selling.

 

If your sales were affected by direct oversees purchases, then just lower the price. Or buy products at much lower prices and sell them for a little higher, but little lower price. If your business is affected to the point of “going out of business” just because of the direct purchases, then you’d better drop that whole business.

written by Lee Yoo Eun of Global Voices. see more.