ed Problems of foreign direct buying

In recent years, there has been an increase in foreign direct purchases, mainly younger people and homemakers buying through the Internet and mobile devices.

The reason is simple: prices in these outlets are considerably cheaper than in Korea, and the outlets offer a wider variety of products. Koreans made 40,000 such purchases worth 1.2 trillion won last year ― and figures show that this will increase to more than 80,000 purchases worth 2 trillion won this year.

Because of this purchasing boom, distributors around the world, particularly in the U.S., are focusing hard on Korean consumers. Companies such as Amazon.com have been providing accurate information to make sure Korean customers do not run into problems. Others like Bloomingdales and Macy’s have been posting information in Korean on their websites and categorizing items of Korean interest.

We have come a long way since we developed a jargon called “jikgujok,” which literally translates to “direct purchase tribe.”

Consumers have every right to buy where they wish, be it high-end department stores or discount outlets, and from overseas. The one problem is that foreign brands, especially luxury ones, are often overpricing their products for Korea.

Most recently, even a Swedish mid-level brand, which is opening a mega-store in Gwangmyeong, Gyeonggi Province, has been accused of overpricing its products here. In a sense, this is something that Korean consumers have earned. Many Koreans simply go for more expensive products.

Still, the enormous increase in online overseas shopping is having a strong impact in Korea, even on local products. One solution could be for Korean companies to market their products directly to foreign consumers on the Internet.

However, various financial regulations laid out by Korean financial authorities make this difficult. A sparkling example of this is a restriction on the foreign purchase of a coat worn by a popular actress in an overseas hit TV drama series.

The Korean government has promised to introduce greater flexibility to make it easier for Korean companies to offer their products online. But with no real action being taken, the companies are forced to use international companies like Paypal and Alipay to carry out foreign transactions.

All this is hurting the Korean economy, and it looks as if it will get much worse before it gets better, if it ever does.

It is high time for the government to introduce policies to reduce the volume of foreign direct purchases by Koreans.