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  • SUTIIVE
  • Veteran

    • 96

    • July 13, 2010, 11:55:41 am
    • Cheonan, South Korea
Why are electronics expensive in Korea?
« on: April 20, 2011, 10:57:02 am »
I don't mean why do you think...I mean, does anybody KNOW?!
I used to think they were expensive in Australia, so I often bought online from the US or eBay.  I waited till I got to Korea to buy my girlfriend a camera assuming that like Japan I would get a good deal on a domestic product, but NO!  After buying it, I realised it was cheaper online back home. 
I thought about it again today because the Galaxy Tab is now available to buy outright in Australia for $299 (the version about to be replaced).  No contracts, no rate plans attached...just take it home for $299. 
I asked my Korean girlfriend how much it is here, it WAS KRW890 000 on sale, and now, at best you can get it for KRW550 000.  That's almost a 50% discount, but still more than the Australian RRP of $408.  THAT IS CRAZY!  For a Korean product! 
Am I missing something?!  What is the reason a Korean product can be more expensive in the country of origin, where generally most things are so much cheaper than home.

I hope someone knows.   Put me out of my misery please. 
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Re: Why are electronics expensive in Korea?
« Reply #1 on: April 20, 2011, 11:08:42 am »
I'm sure this is not the only reason, but one is that Korea places a steep domestic tax on anything that is exported in order to sell the products at a more competitive price in other countries.


  • fudoose
  • Veteran

    • 149

    • May 17, 2010, 02:50:05 pm
    • korea
Re: Why are electronics expensive in Korea?
« Reply #2 on: April 20, 2011, 11:55:27 am »
Monopoly market conditions, if people will pay the price why sell it for less?  Unfavorable foreign product import tax also drives prices up.

Anyway it's not that expensive, it's just dirt cheap in the U.S.


  • lizardflix
  • Adventurer

    • 45

    • June 28, 2010, 08:46:12 am
    • Seoul, Korea
Re: Why are electronics expensive in Korea?
« Reply #3 on: April 20, 2011, 12:01:33 pm »
It's all taxes.  If you go to some of the electronic markets they will sell some items for cash at a discount.  Pretty sure they are avoiding taxes that way.  There are also some shops that will sell grey market items that are again avoiding taxes. 


Re: Why are electronics expensive in Korea?
« Reply #4 on: April 20, 2011, 12:03:55 pm »
I don't think domestic products are really cheap in Japan, either. I don't think anything is cheap in Japan, lol.

Imported products are REALLY expensive in Korea, and Korean products remain a bit cheaper. The retailers can price them as high as they want because there isn't anything cheaper and people buy it because there are no alternatives. (If you choose to order from elsewhere, you get hit with customs fees.)

I thought Taiwan had pretty good prices on electronics, but nothing beats the deals I get in Canada from Best Buy.

Btw, why doesn't anything EVER go on sale here?!?!?


  • Ley_Druid
  • The Legend

    • 2468

    • February 17, 2011, 08:36:33 am
    • Shinan-Gun, Jeollanam-Do, South Korea
Re: Why are electronics expensive in Korea?
« Reply #5 on: April 20, 2011, 12:09:41 pm »
It has to do with the market. The Chaebol control the markets, especially on electronics. They set the rules and they negotiate prices together.

It also has to do with import taxes. They are extremely high for sellers. And remember that cost isn't the driving factor among the masses, but quality. Nobody wants a crappy blender for $10 when they can buy one for life for $40.

Also, for many Chinese, Indonesian, and Vietnamese electronic manufacturer companies, the US is the dumping ground. The US is also the largest product tester in the world, and the reputation of the US markets make other countries envy consumerism and they follow the trends within the US (or Japan in the case of Korea).

Also, the cost of the product goes up when the quantity manufactured is less. As a firm, you can request a manufacturer to build 5,000,000 units of stembolts (woot, star trek reference) to sell in the US, but if you are a Korean firm, your market is less than 1/6th that of the US, so you'd be ordering 700,000 units instead of 5,000,000. The costs of setting up shipping and all that jazz are the same no matter the number. I don't mean that 5,000,000 boxes are the same as 700,000 boxes, but if you have to hire an entire cargo ship, the base costs are the same. You pay to hire and then you pay per unit/box/cargo container/thingamajig that is to be transported.

Ever notice how computers in Korea aren't exactly the same as the US? That means every part that is different is special ordered. The software too! It is more expensive because it costs about the same to make it, but they have to get a larger profit margine because they won't sell as many units. I doubt that Korean MS Office Suite sells as well in Nigeria as the English one.

Language, country, taxes, demand, price of manufacturing, location, transportation, they are all factored in. I could go on much longer about this. And incase you are wondering, I took several econ courses at my Uni and I also studied NE Asian Economies and their turn to consumerism and why they are different than the US economy. :D


  • Ley_Druid
  • The Legend

    • 2468

    • February 17, 2011, 08:36:33 am
    • Shinan-Gun, Jeollanam-Do, South Korea
Re: Why are electronics expensive in Korea?
« Reply #6 on: April 20, 2011, 12:12:31 pm »
BTW, sorry for double posting, but "made in ___" is the same as "assembled in ___"

Your Samsung computer maybe made in Korea, but the parts inside I am sure are not all made here. The one I am using now says "Made in Korea" but the HD is "Made in China" and the processor is "Made in Taiwan."


  • Mr Jason
  • Explorer

    • 5

    • March 18, 2011, 02:39:37 pm
    • Yongin
Re: Why are electronics expensive in Korea?
« Reply #7 on: April 20, 2011, 01:11:16 pm »
understandable  from the Koreans point of view
'cuz the makers know exactly what Korean appliance users are looking for
i.e.  김치냉장고(Kimchi fridge=u can sore up to 2 or 3 years easy fresh kimci in it)


  • SUTIIVE
  • Veteran

    • 96

    • July 13, 2010, 11:55:41 am
    • Cheonan, South Korea
Re: Why are electronics expensive in Korea?
« Reply #8 on: April 20, 2011, 01:13:54 pm »
Ahhh, great.  Waygook really is the place to come for everything.  I might start posting physical ailments questions, things that troubled me as a child...all sorts on here. 

Thanks for all these answers.  All really interesting and no doubt very right. The chaebol monopoly certainly makes a lot of sense. 

Steve.
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  • SUTIIVE
  • Veteran

    • 96

    • July 13, 2010, 11:55:41 am
    • Cheonan, South Korea
Re: Why are electronics expensive in Korea?
« Reply #9 on: April 20, 2011, 01:22:38 pm »
I don't think domestic products are really cheap in Japan, either. I don't think anything is cheap in Japan, lol.

I lived in Japan for 5 years.  Like most places, you get it to fit your budget.  You can live very cheaply in Japan and using websites like www.kakaku.com, you can get electronics at crazy cheap prices.  This mainly applies to Japanese made products like Sony and so on, and they cleverly made domestic products only in Japanese at about 20% cheaper (this is 4/5 years ago) so as long as you could manage the Japanese, you could save a lot. 

You are right though, Japan is not cheap when you first arrive but trust me, $5 all you can drink for 4 hours is a record I am yet to see beaten.  Even in Ginza there were $3 bars where that was the most you paid for anything....food, drinks..you name it.  And trust me, Ginza is land of the $500 steak and $1000/15min geisha lol. 
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  • truongt
  • Veteran

    • 108

    • August 30, 2010, 06:51:00 pm
    • South Korea
Re: Why are electronics expensive in Korea?
« Reply #10 on: April 20, 2011, 03:35:13 pm »
If I remember correctly, there's a political reason for this.

1. In Korea (and Japan), major corporations and government/politics are almost co-dependent (chaebol in Korea, and keiretsu in Japan). As part of this, these companies have government support over the prices of products released by these countries. Additionally, infant industries in Korea (there's a fancy name for it that I don't seem to remember) are also supported by the government.

2. Both Japan and Korea have limited domestic resources to produce products, from rice to flat screen TVs. They export these items for cheap(er), in part because it gets people to buy the products. They make up for the costs of cheap exportation, domestically.

3. Owing to the strong sense of patriotism that is ingrained into the citizens' heads (at least in Japan, their education system gets scrutinized severely on an international level for playing down Japan's antagonist roles at any point of its history), many prefer to buy domestic products even if it may cost a little more.

I haven't studied this in a while, but I'm pretty sure those are two main reasons. Hope it helps.


  • crantor
  • Adventurer

    • 52

    • March 08, 2011, 06:59:31 am
    • South Korea
Re: Why are electronics expensive in Korea?
« Reply #11 on: April 20, 2011, 03:42:05 pm »

3. Owing to the strong sense of patriotism that is ingrained into the citizens' heads (at least in Japan, their education system gets scrutinized severely on an international level for playing down Japan's antagonist roles at any point of its history), many prefer to buy domestic products even if it may cost a little more.


I think it has less to do with patriotism and more to do with the heavy tax placed foreign products.  Try buying a foreign car for example.  It will be double the price!  This economic protectionism, which is expected for nascent economies but could be more relaxed in Korea.  Good news is that Europe and Korea signed a free trade agreement not long ago.  The U.S. is yet to strike a deal though.  I think if there was free trade Korean companies would have to lower their prices domestically or see their margins shrink.
I am often amazed at how much more capability and enthusiasm for science there is among elementary school youngsters than among college students.

 - Carl Sagan


  • truongt
  • Veteran

    • 108

    • August 30, 2010, 06:51:00 pm
    • South Korea
Re: Why are electronics expensive in Korea?
« Reply #12 on: April 20, 2011, 04:27:38 pm »

3. Owing to the strong sense of patriotism that is ingrained into the citizens' heads (at least in Japan, their education system gets scrutinized severely on an international level for playing down Japan's antagonist roles at any point of its history), many prefer to buy domestic products even if it may cost a little more.


I think it has less to do with patriotism and more to do with the heavy tax placed foreign products.  Try buying a foreign car for example.  It will be double the price!  This economic protectionism, which is expected for nascent economies but could be more relaxed in Korea.  Good news is that Europe and Korea signed a free trade agreement not long ago.  The U.S. is yet to strike a deal though.  I think if there was free trade Korean companies would have to lower their prices domestically or see their margins shrink.

I'm not talking about cars, though. Consider purchasing a more ordinary product, like an external hard drive, for example. Nine times out of ten, the domestic product will be cheaper than the imported product. How about purchasing a burger/steak at a restaurant? Not electronics, but still relevant to this argument. It's cheaper to buy the burger/steak made of imported meat than it is to purchase Hanwoo. But Koreans will still prefer to purchase Hanwoo (if they can afford it). I haven't actually tried any before....maybe it tastes divine! (.....Or maybe it just tastes like meat.)

Secondly, taxes placed on imports can also vary depending on where you from (assuming you are a foreigner; I'm not sure what the situation is if you are Korean). I had an American friend who purchased a Kindle from Amazon and got charged a $40USD luxury tax. Meanwhile, my South African friend who purchased the same product,did not get charged.


Re: Why are electronics expensive in Korea?
« Reply #13 on: April 20, 2011, 08:43:54 pm »
Im from South Africa. Electronics here are much cheaper than at home. So i dont really see this as an "annoying thing" even if I came from some place where electronics are cheaper than Korea.

Korea's prices are really not bad at all!


  • christmas
  • Adventurer

    • 66

    • September 10, 2010, 06:45:22 am
    • Chungbuk
Re: Why are electronics expensive in Korea?
« Reply #14 on: April 21, 2011, 03:37:13 am »
in korea, electronics are expensive.  i suggest not buying any of electronics here unless you really need it.


  • confusedsafferinkorea
  • Waygook Lord

    • 5183

    • October 08, 2010, 01:02:32 pm
    • Zhubei, Hsinchu Province, Taiwan
    more
Re: Why are electronics expensive in Korea?
« Reply #15 on: April 21, 2011, 04:04:16 am »
Im from South Africa. Electronics here are much cheaper than at home. So i dont really see this as an "annoying thing" even if I came from some place where electronics are cheaper than Korea.

Korea's prices are really not bad at all!

Hi, I am a Saffer too, and I disagree totally with you, electronic goods are way cheaper in SA than here, I think you are shopping in the wrong places.
There is no known medical cure for stupidity!


Re: Why are electronics expensive in Korea?
« Reply #16 on: April 21, 2011, 06:31:21 am »
Im from South Africa. Electronics here are much cheaper than at home. So i dont really see this as an "annoying thing" even if I came from some place where electronics are cheaper than Korea.

Korea's prices are really not bad at all!

Hi, I am a Saffer too, and I disagree totally with you, electronic goods are way cheaper in SA than here, I think you are shopping in the wrong places.


Well my Macbook, Canon DSLR, L-Lens, Playstation and monitor were all loads cheaper here than in SA!!! I think you are shopping in the wrong places.


  • gookway
  • Super Waygook

    • 263

    • March 31, 2011, 12:22:19 pm
    • Korea
Re: Why are electronics expensive in Korea?
« Reply #17 on: April 21, 2011, 08:29:16 am »
The reason is because Korea makes their own products and not outsourcing them to some poor country where factory workers get paid $1 per hour.

In North America, we can get cheap everything and anything because they have factories set up in China, India, and other parts of the world where they make products at 1/10th the cost and therefore able to sell it for much cheaper.

You don't see Korean factories set up in Africa employing children to make Samsung clothes for 50 cents an hour like America does with Nike. 


  • ame
  • Super Waygook

    • 338

    • December 02, 2010, 02:58:32 pm
    • South Korea
Re: Why are electronics expensive in Korea?
« Reply #18 on: April 21, 2011, 08:32:25 am »
You don't see Korean factories set up in Africa employing children to make Samsung clothes for 50 cents an hour like America does with Nike.

Of course you don't, silly.  They do it in North Korea instead:

http://en.wikipedia.org/wiki/Kaesong_Industrial_Park


  • Shauno
  • Veteran

    • 87

    • November 01, 2010, 10:06:24 pm
    • Gyeongsan
Re: Why are electronics expensive in Korea?
« Reply #19 on: April 21, 2011, 08:47:47 am »
Im from SA too and I agree that products are cheaper in Korea,but some electronics are still cheaper in South Africa. My Samsung computer was cheaper in Korea, compared to an Hp or Dell which was more expensive. My Canon DLSR I got cheaper than back home. In any case I dont think Korean electronics are THAT much cheaper than SA.