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Shopping support business booms with rising overseas purchase

Lee Soo-yeon, a 38-year-old mother of two children in South Korea, frequently shops on various online websites of U.S.-based brands like Gap and Carter’s as well as e-commerce platform Amazon, eyeing major sales events and special discounts.

Around once a month, Lee receives her purchases -- usually foreign-brand baby clothing which are more expensive to buy or entirely unavailable in Korea -- from across the world at her house in Seoul.

Exactly what kind of a hassle does Lee have to endure to get through what may seem like a complex process of buying goods from international online stores, many of which do not offer international shipping?

“Not much,” says Lee, citing the convenience offered by firms like Malltail -- an international shipping support company operated by Koreacenter.com. The company provides users with a free local shipping address in the U.S. and select countries to which users can directly send their orders.

Malltail’s shipping warehouse in New Jersey in the U.S. (Malltail)
Malltail’s shipping warehouse in New Jersey in the U.S. (Malltail)

After the items arrive at its warehouse, Malltail takes care of the remaining steps, shipping the users’ items all the way to their Korean addresses. The standard shipping costs to Korea vary depending on the weight of the packages.

For those who feel uneasy about shopping and navigating through what can be complex purchase processes on foreign websites, Malltail also features a service through which the company actually makes orders on U.S. websites on behalf of its Korean customers.

“The whole process is quite similar to regular domestic shipping, except that it takes a bit longer to arrive,” Lee said, noting that such a “middleman service” has opened up “a new world of shopping,” through which she can easily access a wider range of goods.

Today, a growing number of Korean consumers like Lee are choosing to shop directly on global e-commerce websites -- mostly those based in the U.S. -- in search of enhanced product diversity and lower prices.

The total volume of direct overseas purchases was valued at around $1.54 billion as of 2014, up by 470 percent from just $270 million recorded in 2010, according to the Korea Customs Service.

Eyeing the vast market potential, many firms have jumped into the international shopping assistance business, driving up the volume of direct overseas purchases over the past few years.

Today, industry competition has become more fierce than ever, as major players like Malltail, Ohmyzip, Wemakeprice Box and eHANEX -- established by shipping business giant Hanjin Group -- are seeking ways to attract more users with exclusive benefits and services.

Through a video on its website, eHANEX explains its shipping support system. (eHANEX)
Through a video on its website, eHANEX explains its shipping support system. (eHANEX)

For instance, market leader Malltail claims that its biggest advantage lies in its “premium shipping service” which “minimizes damage to the packages by using direct shipping routes to Korea that cut extra shipping and handling processes that could damage the goods,” according to a company spokesperson.

Moreover, the firm was the first of its kind to implement an insurance system to compensate all customers for packages that are damaged or lost during the shipping process.

On the other hand, Ohmyzip has focused on cuttings costs -- strategically setting up its shipping warehouse in Delaware, which is not subject to a sales tax, offering free refunds, as well as enabling users to group together packages and send them to Korea at no extra charge.

Unlike competing firms which send the users’ packages from Delaware to another warehouse in New Jersey before shipping to Korea, Ohmyzip has established a direct Delaware-Korea shipping route, reducing the total international delivery time, the company said.

“We hope to appeal to customers who feel burdened by the high costs of shipping goods purchased from overseas websites,” said an Ohmyzip official. “With cheaper and faster delivery, we will continue to show our unique strengths.”

Meanwhile, credit card companies are also moving swiftly on their end to build a safer and more convenient international payment system for Korean consumers.

For instance Lotte Card and Shinhan Card recently launched a new “app card” system which allows users to make payments with a temporary card number, enhancing payment security. Samsung Card and KB Kookmin Card are reportedly reviewing plans to launch similar services as well.

“Such trends are very much linked to the fact that people are purchasing items directly from international shopping malls, increasing the total volume of direct international payments,” said a credit card industry official.

By Sohn Ji-young (jys@heraldcorp.com)

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