Differentiation in Export and Import Goods
Differentiation in Export and Import Goods
  • Reporter Kim Jin-Seong
  • 승인 2024.01.01 19:33
  • 댓글 0
이 기사를 공유합니다

▲South Korea’s first Five Guys store in Gangnam / HanwhaSolutions
▲South Korea’s first Five Guys store in Gangnam / Hanwha Solutions

  The demand for Korean exports is increasing rapidly, and the supply growth follows. The exported Korean products are not always the same as domestic products. Sometimes, the price and the product configuration of export goods differ from those of domestic goods. Furthermore, some products are impossible to export due to corporate laws, although the products are high in demand. 
  One classic example of a change in price and components is the Shin Cup, a spicy noodle usually known as Shin Ramyun in a cup made by Nongshim. As Nongshim shared the philosophy of “The Korean taste is the most global taste” and pioneered the global market, the primary taste is the same no matter which country the product is from. However, depending on country-specific food regulations, local culture, and consumer preferences, the composition of soup and ingredients may vary.  Shin Cup sold overseas have no choice but to differ in price and weight, including the ratio of components, in consideration of the local market environment, culture, and consumer preferences.
  The price of the Shin Cup is usually more expensive overseas. In 2012, the sticker price of the Shin Cup in Korea was 850 KRW, while the price was 170 JPY in Japan, equivalent to 2,273 KRW applying the exchange rate. In Switzerland at this time, the Shin Cup cost about 1.80 CHF, which was equivalent to 2,074 KRW. When purchasing Shin Cups in Japan or Europe, you can see they are two to three times more expensive than domestic prices. As the price is much more expensive overseas, the gross weight of Shin Cup is 65 g in Korea but 75 g in Japan and Switzerland. Considering overseas cultures, Shin Cup gives variations in soup recipes and ingredients, such as red pepper. One good example of taking overseas culture into account is including a plastic fork as a package instead of chopsticks in the Shin Cup. 
  The price of export and domestic goods may not be the same. The components differ from local goods, and the exchange rate changes daily. The price might be more expensive or cheaper than the local price. The change in price when imported could be a sensitive issue among consumers, and some consumers claim that the two prices should be equivalent. 
  As Five Guys, a top American burger chain, opened its first location in Seoul’s Gangnam, the high price of burgers sparked controversy. Some consumers pointed out that the price of Five Guys burgers was too expensive. The hamburger costs 13,400 KRW by itself, the famous bacon cheeseburger costs 17,400 KRW, and the milkshakes are 8,900 KRW. However, Minwoo Oh, the CEO of F.G. Korea Inc. said, “We thought a lot about the price and set the price 13% lower than the mainland U.S. and 17% lower than directly managed stores in Hong Kong.” He added, “We compared with the management store in Virginia, a store that is directly managed by the headquarters.” Meanwhile, the Hankook Ilbo claimed that the price is different in each US state, and in some cases, Five Guys in Gangnam is more expensive. Throughout various cases, the price of Five Guys in Korea and in the US seems similar, but is it fair?
  The local and import prices might seem similar, as in the case of Five Guys, where F.G. Korea Inc. stated the prices of imported and local hamburgers are equivalent. However, whether the import and local prices are the same or not, some consumers questioned the identical pricing. They argue that the imported franchise from the U.S. should cost less in Korea since the U.S. has a much higher per capita income.