Customer Satisfaction related to Overseas Purchase:

‘iHerb’ As Overseas Online Mall, ‘New York Girls’ As Shipping Agent, ‘11st’ As Overseas Purchasing Agent

- Overseas purchase items are 31.7% less expensive on average than domestic buying -

    Korea Consumer Agency (www.kca.go.kr) conducted a survey targeting 1,000 consumers who have overseas purchasing experience within the past one year. The result shows that the consumers bought goods six times on average through overseas direct purchase during the period. They spent KRW 270,000 per purchase, KRW 10,000 at minimum and 9 million won at maximum.

    □ Consumers feel that overseas purchase items are 31.7% cheaper on average than domestically traded ones

    The biggest reason for overseas buying is less expensive prices; the consumers answered to the survey that overseas purchase agents offer 31.7% lower prices on average than domestic sellers for the same goods. Especially, items for babies and children are 36.5% cheaper when they are bought through overseas purchase, which shows the biggest gap. Following less expensive items are health supplement food (34.2% cheaper) and clothes (31.7% cheaper). The trend demonstrates that overseas purchase has become a new distribution channel.

    Moreover, when asked if they have experience of buying foreign luxury brand items through the purchasing service, 26.7% of the respondents answered yes, adding that those items are 27.4% less expensive to buy abroad than in Korea. The most popular brands in overseas purchase are Gucci, Prada, and Chanel (22.1%, 19.5%, an 15.7% respectively). Bags are the items purchased the most (58.1% of the whole transactions), followed by wallet and miscellaneous goods(22.8%), clothes and shoes(13.9%), and cosmetics(4.5%).

    * In 2014, Prada was the most popular brand (18.7%) for overseas purchase, followed by Gucci(15.8%) and Chanel(13.3%).

□ iHerb ranks the first in customer satisfaction with overseas online malls

    The top 10 overseas online malls that Korean consumers use the most frequently are: My Drugstore, Rakuten, Shopbob, 6PM, Amazon, Amazon Japan, iHerb, WalMart, eBay, and Taobao.com.

    iHerb gained the highest satisfaction score (4.09 points), followed by Shopbob (3.94 points), Amazon (3.81 points), and Amazon Japan (3.80 points). iHerb and Shopbob, the malls with free shipping service for all orders over a certain amount of money, earned high scores in shipping speeds and shipping safety.

    * iHerb is an online shopping mall for health supplement food, organic cosmetics, etc. Shopbob is for women’s clothes and miscellaneous goods.

    □ New York Girls is the no.1 in satisfaction with shipping agents

    The top six shipping agents that the respondents of the survey use the most are: New York Girls, Malltale, iporter, ohmyzip, WeMakePrice Box, and eHANEX.  New York Girls achieved the highest score of 3.97 points, followed by eHANEX (3.83 points), and Malltale (3.74 points). The winner obtained high scores in three elements: shipping speeds, safety, and compensation for accident.

    □ Consumers pick 11st as the best overseas buying agent before Gmarket and Ppomppuzil.

    The most frequently used buying agents by the respondents were: 11st, Gmarket, njoyNY, Auction, and Wizwid.

    11st ranks the first with 3.65 points of comprehensive satisfaction score, earning the highest points in three elements including prices, shipping speeds and shipping safety. Gmarket and Wizwid got 3.56 points and 3.54 points respectively, following the first place. For reference, shipping agents and overseas buying agents via online clubs (or ‘cafes’) and blogs obtained lower score than any other agent. Consumers therefore need to be aware of the business information and meticulously check customers’ review.

    * The satisfaction scores of online club and blog agents are: 3.26 points for shipping agents and 3.29 points for buying agents.

    □ America is on top, China and Japan are on the rise in overseas direct purchase

    According to the survey, the United States makes up the biggest share (73.2%) of the overseas purchase market in Korea, followed by China (7.8%), Japan (6.6%) and Germany (4.1%). But Korean consumers increasingly buy more goods from China and Japan compared to 2014, which demonstrates that the pattern of overseas purchase is being shifted.

    * The U.S. (86.0%), China (3.6%), Japan (3.2%), Germany (2.3%) in 2014

    □ Beginners accounts for 44%, attention towards damage prevention is needed

    Beginners who used the overseas purchasing service for less than a year make up 44% of the whole respondents, which is the biggest number, followed by those who used it for more than a year but less than two years (25%) and those for more than two years but less than three years (15.9%). Meanwhile, the percentage of people who do not know well as to how to use the service was 46.5%, which indicates that consumers must access various information for no damage from overseas purchase.

    The KCA operates Cross Border Transaction Consumer Portal web site (http://crossborder.kca.go.kr) as part of Government 3.0 for consumer’s safe purchase from abroad. Guidelines for the Protection of Consumers in E-Commerce as well as information related to tariff, customs clearance, and parallel import are provided on the portal. Consumers are encouraged to refer to ’Guidelines for Overseas Purchasing Service Users’ and ’Checkpoints for Damage Prevention from Overseas Purchase.’

    Furthermore, the KCA has signed MOUs with the consumer agencies of other countries – the U.S., Japan, Thailand, and Vietnam so far - to redress domestic consumers’ damage. In case where consumers have disputes while using online shopping malls within these countries, they can ask for dispute settlement at the portal. The KCA delivers the case to the counterpart and tell the consumers how the case has been redressed.

    * MOUs with Vietnam (Vietnam Competition Authority, June 2015), Japan (National Consumer Affairs Center of Japan, July 2015), the U.S. (Council of Better Business Bureau, May 2016), and Thailand (Office of the Consumer Protection Board of Thailand, June 2016)