Cheap vs Cheaper in Hard Times
By Kim Hyun-cheol
Staff Reporter
Even $1 seems too much for consumers suffering from the economic downturn. Now they are turning to ultra-cheap items being sold under 1,000 won ($1) at online shopping malls.
Auction, or the Ebay of South Korea, saw its number of visitors nearly triple thanks to a recent series of sales promotions. The site sold more than 10,000 pieces of three kinds of T-shirts each, priced under 1,000 won ($1), with one of them having sold 24,000 since July 25.
``Many more customers are visiting the site in a promotional campaign headed by extremely cheap special items,'' an Auction marketing executive said.
Another major online marketplace, Interpark, saw sales in its super-cheap item section surge 35 percent in the first half of the year. Three of its five best-selling goods between January and June cost under 1,000 won each, with a package for bicycle accessories topping the list.
Other e-commerce sites, including Auction archrival Gmarket and the Internet malls of major department stores, are keeping pace by introducing a list of $1 items in their sales lineup.
Gmarket is selling fashion goods for 990 won in a seasonal sale campaign. Shinsegae Mall, an online affiliate of Shinsegae Department Store, has a similar ultra-cheap section and enjoyed 10-percent growth in sales last month from June.
``It's good for both us and consumers,'' a Shinsegae Mall source said. "Thanks to the prices, most consumers can purchase more items than expected and not worry over budget."
The economic slump is the biggest reason for the popularity of ultra-cheap items at a time when consumers are highly sensitive to price. The cheap items, however, are likely to continue selling even after things improve because most buyers are satisfied with their quality, the source added.
Offline stores are also doing brisk sales of ultra-cheap items. Daiso, a Korean discount chain based in Japan, posted sales of 62 billion won in the first half of the year at around 130 stores nationwide, up 73 percent year-on-year.
Online markets are a major retail force in the country. The value of Korean online shopping malls was 16 trillion won ($15.7 billion) last year and is expected to exceed 18 trillion won at the end of this year.