Overseas direct purchases for buying products directly from sellers abroad and not via importers is effective in reducing consumer prices.
On Nov. 4, Researcher Choi Chang-bok at the Bank of Korea Economic Research Institute released a report on overseas direct purchases and its effects on inflation and changes in product distribution, and said that the practice leads to price competition among distribution companies to have an effect on inflation on the macroeconomic side.
According to his report, the inflation rate of the items that are included in the Korea Customs Service’s list of 103 major direct purchase items and the domestic consumer price index at the same time is much lower than that of the others. “It is estimated that the practice tends to lower overall consumer prices,” he said, adding, “In the long term, it is expected to result in a decrease of two percentage points or less.”
The size of overseas direct purchases by Korean consumers doubled from 800 billion won (US$703 million) to 1.6 trillion won (US$1.4 billion) between 2012 and last year, and the rate of increase is predicted to keep going up with time.