Global fashion brands block Koreans' access to US websites

Some global fashion brands such as Ralph Lauren Corp. and Tommy Hilfiger have blocked South Koreans’ access to their US websites to support businesses in Asia’s fourth-largest economy by preventing local cross-border online shoppers from taking advantage of lower prices in other countries.

Those companies automatically change their US website addresses to those of South Korea even when customers in the country type uniform resource locators (URLs) for the United States, according to fashion industry sources in Seoul on Wednesday.

When consumers type in www.ralphrauren.com to buy a polo shirt from Ralph Lauren’s US website, the company directs them to its South Korean site www.ralphlauren.co.kr opened last year, for example. Tommy Hilfiger also guides such shoppers to the website of Handsome Corp., its authorized distributor in the country.

Cross-border online shoppers in South Korea thus try to use virtual private networks (VPNs) to access US websites of these premium fashion brands. To deal with such attempts, those labels only allow customers to pay with US credit cards, Amazon Pay, an online payments processing service of the country’s top e-commerce operator, or other domestic payment service providers.

US PRODUCTS ARE CHEAPER

Cross-border online shoppers in South Korea had previously bought fashion items from those brands through the US at lower prices than they are sold locally. 

Ralph Lauren sells men’s Oxford shirts for as low as $80 on its US website while the prices of the same clothes start from 153,000 won ($116) on its South Korean online shopping mall, for example. Those cross-border shoppers could enjoy discounts with coupons for its US websites and during Black Friday sales.

Those fashion houses have noew blocked those customers’ access to their US websites as they aim to expand shares in the rapidly increasing South Korean market.

Further growth in cross-border shopping is likely to hurt the entire local fashion retail sector and jeopardize their efforts for market expansion, industry sources said.

The online purchases are also expected to disrupt global fashion makers’ price policies for each region, they added. Some brands set different prices for the same items country by country as manufacturing costs differ based the origins of the materials and production costs.

“It is the companies’ discretion to apply different business strategies to each country, but blocking access to their websites can be regarded as limiting consumers’ options,” said a fashion industry source in Seoul.

Write to Jiyoon Yang at yang@hankyung.com
 

Jongwoo Cheon edited this article.