“Eh you going Korea ah, help me buy face masks leh!”
It is common knowledge that masks in South Korea are insanely cheap when compared to prices in countries like Singapore (at least 30% cheaper). E-commerce has changed the game of retailers permanently. A mask in Korea costs about SGD$0.60. For the exact same mask, we might have to pay twice the amount or more back in Singapore. Why is there such a great difference in price?
#1 Crazy High Demand
We’re not just talking about high local demand, we’re talking about the foreigners that travel to Korea and buy masks back to their home countries in bulk. By bulk, we mean buying hundreds of masks at once.
It is become almost a need than a want for Koreans to use face masks. Korean women spend twice as much as their American counterparts on beauty products.
#2 Stiff Competition
The Korean beauty industry is thriving, growing at a phenomenal rate. Most people would have heard of top Korean brands like Innisfree, Laneige, Nature Republic, Skinfood, Etude House, The Face Shop and more.
Blocks of beauty shops lined next to one another are a common sight in Korea, especially in popular streets like Myeongdong. This increases the total traffic as the street attracts an insane number of tourists.
However, this also means that there is direct competition everywhere and beauty companies have to keep their prices competitive.
#3 Ease of Information Flow
Gone are the days where retailers could price their products at high margins. With the use of the internet and information flow today, consumers have easy online access to the price of goods sold both locally and overseas. A simple comparison would show any consumer how much they could save by purchasing the same product from overseas.
Will you buy a beauty product for S$36 when you know you can get a friend to buy that exact same product in South Korea for S$12? Probably not.
#4 Shipping Fee, Import Duty & Tax
Being produced in Korea, the masks sold in Korea do not have to factor in the cost of shipping or taxation. The cost of shipping the masks overseas, coupled with the import duty and tax on the shipment by the home country, this cost contributes to the pricing of products.
Buying masks in Korea is cheaper as these costs are, in a sense, eliminated. Many of the beauty brands in Korea entitle you to tax refunds. This is almost equivalent to having an additional 5-7% discount on your purchased items! (But do remember to request for a VAT refund receipt at the counter.)
Read Also: Why Magnum Ice Cream Sticks Are More Expensive In Singapore
#5 No Such Thing As Having No Other Option
Consumers now have the upper hand. They are spoilt for choice.
Retailers have to change their pricing strategy. Substitutes for products are readily available and demand is highly elastic. The ease of ordering and delivering products from overseas has provided consumers with more options for them to choose from. We are no longer restricted to the brands that are operating in Singapore. If we want, we can purchase them from overseas, and at a cheaper price even.
#6 Rate of New Products Being Produced
Korea is the trendsetter. There are always new and improved products to buy.
The evolution of Korean beauty products is astounding. South Korea is at the forefront of research into beauty products, driven by the lucrative market’s high demand. This, coupled with their creativity, constantly introduce improved products to the consumers (think “Snail beauty”, animal masks, BB cushion compacts, Laneige’s Two Tone Lip Bar etc.).
Brands overseas tend to lag in keeping up with the pace of growth of Korea’s beauty industry. The novelty of a newly launched beauty product overseas is lost when Korea is able to introduce it much earlier.
With the significantly lower prices in Korea explained, your excessive purchase of masks when visiting the country is more than justified.
Image Credit: DollarsAndSense.sg
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