Bad News for Flashers and Sex Pests and Foreign Investors
by Brendon Carr
Ripoff Korea makes it much more expensive to be a “Burberry Man” (the Koreanism for a flasher, based on the best-known brand of trenchcoat here) in Seoul—up to 52% more expensive than the appalling cost in Tokyo. The Maeil Business reports on the shocking cost of living in Korea:
Maeil Business Newspaper and KOTRA (Korea Trade-Investment Promotion Agency) jointly investigated commodity prices in Seoul, New York, Tokyo, London, Paris, Beijing and Hong Kong in January to discover a women’s trench coat from a major luxury brand, Burberry, to be most expensive in Seoul at 1.7499 million won. Even considering the difference in material and design, the retail price of the trench coat in Korea was overwhelmingly higher than those in London (1.14 million won), Paris (1.2 million won) and Tokyo (1.1476 million won).
McDonald’s Big Mac, the commonly used international price index, is sold at 2,900 won in Seoul, 525 won higher than 2,375 won in Japan and twice more than Beijing’s 1,520 won.
Starbucks Americano (237㎖) was sold at 2,800 won in Seoul, also more expensive than the same drink in New York (2,166 won) and Tokyo (2,090 won).
Compared against a year prior, Korea’s high commodity prices have not budged down. Last year, the trench coat was priced 1.75 million won in Seoul and 1.01 million won in Tokyo. Although the year-on-year price change in each country has slightly narrowed to 1.7499 million won and 1.1476 million won, the price in Seoul has stayed put.
McDonald’s cheeseburger was also more expensive in Seoul than in Japan—1,300 won vs. 774 won. The price gap between Korea and Japan once again failed to slim this year with the Big Mac priced higher in Seoul at 2,900 won against Japan’s 2,375 won.
The price difference in cars was more significant. Synonym for a luxury car, Mercedes-Benz S500 was sold for 206.6 million won in Korea, more than twice the price in New York (83.1 million won) and almost twice that in Tokyo (105.7 million won).
Cost of living contributes mightily to multinationals’ choices of where to place their “hub”. While few expatriate managers are clamoring to buy US$1800 Burberry trenchcoats, the Big Mac and cuppa joe are essential to keeping foreigners happy. (Here’s a tip: At lunchtime, McDonald’s has W3000 “value meals” which make the drink and fries next to free.)
If you feel us attorneys’ hourly rates are too high, please understand: We’re getting ripped off too.
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Twice as pricey seems to be the rule of thumb. I’ve been investigating air filter options for my home and had settled on a highly regarded Swiss-made air filter that retails for $795 in the U.S. That’s pricey to begin with, but it’s cheap compared to the Korean retail price: 1,980,000 won (~$2,100).
The reason for all this is the lack of competition and real open market economy in Korea. Many people i know make jokes that the economy here looks very much like Nazi Germany before WWII. Few large companies are sponsored by the government. No outside competitors are allowed. WallMart left Korea. Carrefour left Korea. Costco does not look like Costco in US.
I’ve been here since 1996, I like the Korean people, but I am leaving next week. Most of my Korean friends agree that this country has to change drastically, but this will not happen with the new president. He is part of the old guys.
FA, sorry to hear you’ll be spending so much on that air filter. Me, I’m getting a nice MacBook Air for that kind of money—the price of that is just about the same as in the States. Hurray for Apple.
But I may be buffaloed into the air filter as well. Please pass along your dealer’s contact information.
I think that the coffee is a little overpriced too, but price comparisons may be a little more complicated than they first appear. It’s a little dated, but back in January 2004 the Economist magazine published an article called “The Starbucks Index” discussing it, similar to its more well-known “Big Max Index,” and it showed that, then at least, Korean starbucks coffee was only 6% more expensive than the exchange rate against the dollar.
I would link to that article itself rather than the post on my blog, it’s not one of my best(!), but the article needs subscriber access on the Economist’s site. So I copied and pasted it in full here: http://thegrandnarrative.wordpress.com/2007/09/15/mcdonalds-coffee-challenging-starbucks/
Moving from Korea to Japan was a pleasant surprise. The only thing more expensive here compared to Korea is transportation, which is a bargain in Korea but shockingly steep in Japan. Other than that I’m very happy. It’s easy and quick to get a cheap apartment here too.
Transportation in Japan, in my experience, is like catching Ebola in your wallet. The hemorrhaging starts upon arrival and stops only upon your death.
I’m curious about the cost of purchasing apartments. I live at the edge of the Central Business District (Seodaemun subway stop on line 5), in a 43-pyong place we bought in 2003. It’s too small, and I wouldn’t want to live in a smaller place—but as a local hire without some foreign organization footing the bill, I can’t justify W5,000,000 a month for the 65-pyong size I’d prefer.
My wife went to college in Japan and is fluent in Japanese. She says we’d never get a 43-pyong apartment in as good a Tokyo location for twice the price. Is she full of it?