[Overseas Direct Purchase Warning] "Direct Purchase Damage Resolved by Establishing Domestic Logistics Spaces"

Interview with Shin Jong-won, Former Chairman of the Consumer Dispute Mediation Committee

Consumer Damage Occurs Due to Inventory Overseas
If Inventory Accumulates in Domestic Bonded Areas
The Government Can Manage Even Hazardous Items

The Korea Customs Service has organized special clearance support teams at customs offices such as Incheon and Pyeongtaek to facilitate the swift clearance of express shipments in preparation for the concentrated import of overseas direct purchase items like gifts during the Chuseok holiday period. On the 29th, a Korea Customs Service official was working at the Incheon Customs Express Logistics Center in Jung-gu, Incheon. Photo by Airport Press Photographers Group

[Asia Economy Reporter Jeon Jinyoung] "The fundamental reason for problems with overseas direct purchases is that the inventory is located overseas. This can be resolved by creating space within the country to store overseas inventory."

Shin Jong-won, former Chairman of the Consumer Dispute Mediation Committee.

On the 26th, Shin Jongwon, former Chairman of the Consumer Dispute Mediation Committee, proposed in an interview with Asia Economy that a logistics space for overseas direct purchases be established in domestic bonded areas to prevent consumer damages related to overseas direct purchases. Shin stated, "Since the inventory is overseas, consumers cannot check the products in advance, and returns involve significant time and cost. We need to break the fixed notion that overseas direct purchases must be shipped from abroad. Conversely, bringing sellers' inventory from overseas into the country can greatly reduce return costs."

Since 2014, China has implemented the "Online Bonded Import System," which allows foreign sellers to keep sales inventory in bonded areas and sell products. Shin believes that implementing this system would naturally lead to better management of hazardous goods entering through direct purchases. He explained, "Domestic laws do not apply to goods personally imported by overseas direct purchase consumers, making them vulnerable to hazardous products. Even if the Customs Service cracks down, eradication is difficult. If a dedicated logistics space for overseas direct purchases is created domestically, it would fall under our government's jurisdiction, enabling efficient management." In fact, in China, the system received strong consumer support, and by its third year in 2017, online bonded imports accounted for over 60% of all overseas direct purchase orders, becoming highly active.

With overseas direct purchases increasing ahead of Black Friday, consumer damages such as delivery delays, wrong deliveries, and product defects are also expected to rise, so consumers need to be cautious. Shin advised, "Due to the nature of overseas direct purchases, it is impossible to completely prevent fraudulent sites from appearing. Consumers should actively search and make careful choices. Obtaining information and seeking help from the International Trade Consumer Portal operated by the Korea Consumer Agency is also a good method." He added, "If damages occur from direct purchases, consumers can use the withdrawal system stipulated by the Act on Consumer Protection in Electronic Commerce, etc. If purchases are made through overseas purchasing agents on open markets like Naver, consumers can receive assistance through consumer organizations and the Korea Consumer Agency's damage relief procedures."