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:
Our country is such a pushover…
I don’t understand why buy this cheap shit when it doesn’t even look good
Why does every brand become more expensive in only our country
The country of misguided customers, South Korea!
Our country is truly the imprudent consumer of the word
Isn’t 96% a little much… the answer to this is a boycott, seriously
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.
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.
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.
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.
Zara has poor quality but department store prices haha
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?
Our country feels like a colony ruled by the rest of the world.
Lousy quality expensive prices.
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