Koreans Pay More for Zara Clothing Than Any Other Country

Article from Yonhap: [June 9, 2015]

Fashion Retailer Zara: More Expensive in Korea than Anywhere Else in the World

Spanish fashion retailer Zara has been swept up in controversy after it was found that its prices are more expensive in Korea than anywhere else.

According to a report from Spanish newspaper El Confidencial on June 9th, Morgan Stanley commissioned the market investigation enterprise AlphaWise this past April to investigate 7,000 Zara products sold on 14 different websites and found that Korean prices were double those of Spain.

A closer look reveals that the countries with the smallest differences were France, Germany, and Italy, with Zara products priced 22%-24% higher than Spain.

Countries where Zara products were over 50% more expensive included India (53%), Japan (62%), Russia (76%), China (78%), and the United States (92%), leaving Korea as the most expensive of all 14 countries in the study with 96% higher prices.

However, the news outlet did not reveal whether the 14 websites used were the official Zara online markets for each country.

During the last two fiscal years, countries where Zara’s managing body Inditex Group opened the most stores includes Russia and China, with 124 and 105 new locations respectfully. Korea tied with Canada, Hungary, and Romania by opening 10 new stores.

The Inditex Group manages brands including Pull and Bear, Massimo Dutti, Bershka, Stradivarius, and Oysho from its headquarters in Spain with approximately 6,500 stores worldwide.

Stock in Zara Retail Korea, the company responsible for the Zara brand domestically, has been split between Inditex Group (80%) and Lotte Shopping (20%) since 2007. South Korea has 43 stores as of January 2015.

Since entering the market, Zara Retail Korea increased sales by 20% through 2012. However, it saw its growth stunted the following years when it recorded only an 11.5% increase in 2013 and a 4.6% increase last year. Records also indicate it suffered an 8 billion won [around 7 million US dollars] operating loss last year.

Analysts point out that Zara has failed to compete in price or quality in a retail market where H&M, Uniqlo, and even domestic brands like Eight Seconds, SPAO, and Top Ten are rushing in.

Zara Retail Korea declined to comment on this report.

Comments from Naver:

rsh8****

Our country is such a pushover…

kgbb****

I don’t understand why buy this cheap shit when it doesn’t even look good

hybb****

Why does every brand become more expensive in only our country

swim****

The country of misguided customers, South Korea!

0424****

Our country is truly the imprudent consumer of the word

zxsa****

Isn’t 96% a little much… the answer to this is a boycott, seriously

lja6****

If you go to a Zara in Spain the girls are all waiting in line with 7-8 items each… that’s how affordable it is. You can’t find anything besides winter coats that costs more than 10 bucks.

herb****

Zara’s clothes really aren’t anything special.. how did they end up so expensive when the quality and designs are worse than even the selection in Dongdaemun market.. I went one time and immediately left for Dongdaemun wondering why people would go there.

hyos****

Our weird country where something has to be expensive in order to sell.. and yet if you raised public transportation prices by 10 cents people lose their minds.

zmcb****

Is it only Zara? Foreign clothing brands like H&M are all expensive in Korea. That’s why you don’t buy here, you go abroad and bring stuff back.

sd14****

Zara has poor quality but department store prices haha

ooyu****

To see people flock to buy something just because it’s more expensive… I personally like Zara but it’s prices are theft considering that it’s a retail brand. That’s why I could never buy anything, I was just in shock. The prices really suck. Shouldn’t a retailer pay more attention to costs?

ejvk****

Our country feels like a colony ruled by the rest of the world.

math****

Lousy quality expensive prices.

ming****

Wow, our country really is a pushover :( Rather than shopping at Zara, just go spend the extra money on some nicer clothing already. Also the designs… don’t know how they’re perceived in Spain but there’s a lot of weird stuff

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  • commander

    Different pricing is hardly surprising.

    Well-established economic theories suggest that in a pursuit of profit maximization, a monopoly can formulate and implement a pricing discrimination strategy, which means the monopoly sets different prices for two countries, with higher prices for consumers in one country with the willingness to pay higher and lower prices for buyers in the other country who are less likely to pay more.

    This pricing tactic is widely observed because purchasing power and curreny value vary from country to country, setting the stage for a monopoly to determine different prices to sell their products in different countries.

    That is why some medicine, developed and supplied by a giant pharmaceutical, have different prices in countries, with one for developing, underdeveloped country being relatively low.

    As a result, the product on sale in an developing country sometimes imported back into a country where the identical good is sold at higher price in what we call “parallel import.”

    Thus, the key question is: Is there any way to get prices of Zara down in South Korea?

    If the brand power of Zara was not strong, thus its brand loyalty was variable and there were many alternative purchases, say, Uniclo, Zara would find it hard to set high prices for their clothing for South Korean customers.

  • bosco

    Lol korea. The biggest suckers in the world.

    • troll_harder

      umm… what about those who pay out of the arse for square watermelons? morons all over the world… you being one of them…

      • bosco

        Indeed idiots in every corner of the planet. But Koreans and Chinese have a special style of being absolute suckers for anything brand named. No matter how tacky or gaudy looking or the price, if it has a brand name, they want it.
        It’s funny how my comment hurt your feelings. Did you just finish shopping at the local Zara shop? It’s OK. Maybe you can get a refund.

        • troll_harder

          Singling out Korean’s and Chinese is just showing your bias. The Japanese are just as bad… and SE Asian’s are no better…

          I don’t shop at Zara, sorry to disappoint…

          • bosco

            Commenting on reality, uncomcomfortable as it may be for you, isn’t bias.
            Every other month there is a story of some “luxury” brand gouging korean consumers.
            They do it because they know that no matter how ridiculous the price, there will always be a bunch of suckers in Korea who will line up to buy it. Like the Chinese, still in the peasant in a suit, noveau riche mindset.

          • troll_harder

            You are mistaken to assume that, I disagree with you or I am uncomfortable with “your reality”. It’s clear that your bias is getting in the way and keeping your scope on this “phenomenon” strictly to Korea and China… Jaded mindset…

          • Fan

            yean, Korean and Chinese might be the noveau de riche, but better than you who pretend to be some elegant noble, but actually got a empty pocket. pitty for you guys.

    • Bobby

      I’m glad. These morons get into debt get stressed then the women sell their bodies. They then look down on South East Asians.

      haha Koreans are in a developed country but one of the largest sex industry. Many go to Australia, Brazil, USA to whore.

      Good work kimchinks!

  • chucky3176

    “Why does every brand become more expensive in only our country”

    Why? Because the foreign brands know if they mark them up higher and higher, the more sales they will get. Just because they are expensive and foreign, Koreans think they are the tops. Prudent shoppers would not let this happen, but not in a country where status symbols rule. You can get better quality clothing from Dongdaemun market than some of these overpriced foreign branded junk made in China by child labor.

    • Boris

      Same seems to apply in China. The people pay more for something that is a label, that is the same the world over, but in Asia it seems people want it to show off even more.

      • 금정산

        Yep, Asian cultures are much more “face” oriented and superficial.

    • Fan

      now most of these products are not produced in China, you low animal. you are looking from 20 years ago prospect.

      • Xman2014

        It was only last year when Samsung was wrapped for

        subcontracting the assembly of electronic parts from Chinese subcontractors who used child labor.

        http://www.bbc.com/news/business-28289652

        Sure it still goes on in China. As much as 10 million child laborers working in Chinese factories, as estimated by labor watch organizations.

        http://webpages.scu.edu/ftp/multimedialearning/wkwok/printable%20version.htm

        To be fair though, China isn’t the only country using child labor. There are other countries like Bangladesh, Pakistan, Indonesia, Vietnam, etc where multi-nationals have moved into take advantage of cheaper labor.

        High profile brands accused of subcontracting child labor include 10 major clothing brands like Marks and Spencer, H&M, Nike, Walmart, Gap, La Senza, Disney, Sears, Joe Fresh. and other brands that Koreans love to purchase.

        http://www.therichest.com/rich-list/most-shocking/10-major-clothing-brands-caught-in-shocking-sweatshop-scandals/?view=all

        • Fan

          i just searched online. indeed China do have some cases of child labour, but it’s very rare now, and most of the kids are those who don’t lilke going to school and chose to work, schooling in China for minors are free now. if found hiring a child labour the business owner would be severely fined, it’s not worth the risk for them to hire child labour whlile there are more efficent adult work force, i bet you have never been to China, and the info you read about China is only by the so called “report says”

    • takasar1

      Textiles are Bangladesh and Vietnam….

  • That’s marvelous

    Many retailers that are considered dirt cheap lower class in their own country are marketed as fancy European stylish exclusive brands abroad, especially in Asia since they are suckers for that kind of pricing/branding strategy.

    Some cosmetics and bags are even 3x or 4x the price in the west.

  • bang2tang

    zara also expensive and seen as cool brand in indo at least few years ago

  • B

    Zara is considered as a low brand here in Spain. No one buy their products expcept wannabes.

    • trufax

      nah, the lower brands are probably bershka and others stores like that. Zara is quite “expensive” these days (at least for a broke student like me)

    • troll_harder

      In Canada Zara is considered mid-high brand… Too bad no one here gives a shit about Spain or what Spaniards think about… for that matter, what Canada or Canadians think…

      You need to try to troll a little better… or troll_harder… lol (pun intended)

      • B

        I do, since Zara is spanish brand. And I’m not trolling, I’m just stating a fact. Ask a normal spanish person and he or she will say the same thing. I don’t understand why is that trolling, but ok, if that makes you feel better, I’m fine.

        And let me guess: you’re another korean living in Canada, am I right? Don’t worry, keep wearing that made in China crap, it’ll make you look like an exclusive, classy asian. It won’t make you smarter, though.

        • troll_harder

          Touched a nerve did I?

          You assume too much… and yes your comment was trolling, if you were not trying to, then you should had added more context… and to use an anon account… come on… only you would think you’re not trolling… specially with an ending calling Zara shoppers wannbes…

          Classy Asian… China Crap… Let me rephrase my end point for you… no one gives a shit what your smug ass thinks… I’ll end it here.

    • Dark Night

      Wannabes? What do they want to be?

      • troll_harder

        Cool like him… LOL

  • 안토니

    Don’t forget the local retail giants politics (Lotte…) in this kind of matter, they makes lot of money on foreign brands.
    What’s the point in selling foreign goods at a cheap price when you already have your own local cheap brands to sell ?

  • 금정산

    This is true for most foreign products in Korea. The prices are inflated because people in this materialistic society are willing pay. Don’t blame the band, don’t blame the country, blame yourselves.

  • 右派

    We Japanese think of Uniqlo clothes as clothes from discount dollar store brand in Japan. Stupid Chosenjins think it’s special brand. wwww…… Still…Koreans should thank Japan for selling high quality Japanese goods to them.

  • risotto

    I’ve never heard of Zara. I live in the States, though, so there are too many brands to keep up with.

    • NondescriptRG

      It’s quite popular in many countries, Russia as well, for instance.

  • alesmith

    Sodastream is a even more of a hike. In Korea, Sodastream official prices are over 3x the US price.

    Power machine 289k won:
    http://www.sodastreamkorea.net/product/detail.html?product_no=28&cate_no=1&display_group=2

    Same machine, plus a CO2 bottle, $99 in US:
    https://www.sodastreamusa.com/sodastream-source-starter-kit-p356.aspx

  • RichP

    Hmm…
    prices are determined by the market… Korean customers vote with their
    wallets, and since Zara is not going out of business in Korea it surely
    just shows that this is the price Korean consumers are willing to pay
    for the product. I don’t really see how it can be painted as taking
    advantage, there are plenty of alternatives for clothing in Korea. It is
    not Zara’s (or any other companies) fault that Korean’s are addicted to
    brands, the consumers have other choices and they don’t take them,
    whose fault is that?

  • woonawoona

    Although this phenomenon is present in other countries, it definitely is exaggerated here in Korea. 허세 Ho-sae really sums up this concept. Koreans are all about the flaunt

  • News2Disqus

    Yes, Korea is expensive. Not cheap!!!!!!!!!!!!!!!!!

  • cloud9

    Picked up some ZARA clothing while in Korea.Most of the stuff was sourced from Turkey and the quality was really awful ,even worse then Target and KMart.

  • guestt

    Zara is branded as a low-cost clothes brand, if it is not low cost why bother with the reduced quality?…

  • Bobby

    You could sell shit in Korea if youbrand it well, put it in an expensive box and some Korean idols are used to advertise it.

    This is very common for Chinese and koreans they’ll sell their bodies to buy designer brands.

    Zara is smart to rip these people off.

    Good work!

  • JoyBells

    My country India is up there with 53%.
    Its pretty popular here among college kids for their dresses and boots but didnt realize we were paying 53% more!

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