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Black Friday boosts foreign online shopping sites

Korean shoppers rush to online arkets on Black Friday and tax enefits from Korea-U.S. FTA

Nov. 26, 2012 - 20:09 By Korea Herald
Spending a few hours every day browsing on U.S.-based online shopping malls for a good deal became a habit for 27-year-old office worker Cho Yun-hee ever since Black Friday sales began last week.

“I have heard of Black Friday before, but considered it irrelevant to me because I live in Seoul. I only recently found out that there are ways I can take part in it by using overseas purchase and delivery agencies,” said Cho.

“It will be cheaper than purchasing in Korea, even taking into account the delivery and commission fees.”

Overseas purchase and delivery agencies saw a rush of Korean consumers showing new interest in Black Friday, the biggest sale season in the U.S. which starts the day after Thanksgiving Day and continues until the year end. 

The interest is exceptional this year, market insiders say, based on anticipation of the tax benefits due to the Korea-U.S. Free Trade Agreement. Only products that cost below 150,000 won ($138) including delivery costs were duty-free before the trade pact, but the limit was bumped up to $200.

The overriding public sentiment that foreign products, clothes in particular, are highly overpriced here compared to countries of origin is also fueling the trend.

U.S. casual-apparel brand Gap even blocked its website to servers in Korea ― thought to be a measure to prevent an expected sellout caused by Korean consumers ― according to reports.

The brand, imported here by Shinsegae International and often criticized by Korean consumers for being overpriced compared to in the U.S., is mired in controversy over the matter.

“The direct overseas-purchase market online is quickly growing in Korea, driven by the development of the Internet and consumers’ enhanced foreign-language skills. Consumers are getting smarter,” said Yu Seong-ho, PR official of MakeshopNCompany, a global e-commerce and IT firm which runs the nation’s biggest overseas purchase and delivery agency malltail.

Malltail, for example, saw over 22,000 new members this month as of Nov. 20, which about 25 percent higher than other months when the average new member registration was around 17,700.

The overall figure of orders for international purchase or delivery through agencies was about 100,000 last year, which was already a jump of about fivefold to sevenfold on-year for most companies. Market insiders expect that the number will further grow this year.

Agencies readied for the rush period. Malltail recently moved and expanded by threefold its distribution center in L.A. Other agencies, including Plein run by GS Shop, hired more employees or began additional sales.

Consumers are sharing tips on how to make smart purchases through online cafes and purchase and distribution agencies. Various information from how-to guides for first-timers and must-know English terms to make purchases at U.S. online shopping malls to tricks to change a server’s Korean IP address are easily found online.

By Park Min-young  (claire@heraldcorp.com)