It’s a weird quirk of the global economy that sometimes the exact same item can sell for very different prices depending on what country you’re in. For example, in the U.S. Levi’s jeans cost about half what they do in Japan.
As a result, I always wait until I’m taking a trip back to L.A. before I buy a pair of Levi’s. Unfortunately, that’s probably not an option for travelers who want to take back furniture from IKEA, which in Korea sometimes costs 80 percent more than it does in the U.S.
One of the iron laws of business is that products sell at the prices that people will buy them for, and not necessarily the cost of producing and delivering them. So, for example, IKEA’s decision-makers took a look at one of their TV stands, and calculated that American consumers would be willing to part with $249 for it.
▼ That $211.65 is the sale price, with the regular price at the very bottom left.
Meanwhile, the Swedish-based company’s South Korean team evaluated the same unit and felt that 449,000 won would be a reasonable expectation.
That six-digit price might be causing a bit of sticker shock, but it’s important to bear in mind that the won doesn’t get subdivided into smaller units like the US dollar does with cents. Still, though, 449,000 anything sounds like a lot, so just what does IKEA’s Korean price convert to?
US$410, or almost 65 percent more than American shoppers would pay for the exact same item.
The premium Korean customers pays shrinks, but by no means disappears, with this pricier TV cabinet.
The Korean price of 1,596,000 won works out to US $1,457, meaning Korean IKEA branches will still charge you more than 40 percent extra to set your living room up in style.
With such huge price differentials, it’s enough to kill your TV-watching enthusiasm entirely. Maybe it’d be better to just hit the sack early, so you can get up in the morning and show up at work full of energy and ready to make that IKEA-buying money.
Speaking of sleep, how do IKEA’s American and Korean bed prices compare?
▼ US$179 vs. 359,000 won (US$328), or an 83-percent increase
Even online commenters in Japan, a country used to paying higher prices for consumer products than many other countries, were shocked at the regional price differences.
“Damn. I would have expected more from IKEA.”
“Geez, IKEA too? Are Korea’s import tariffs so high they really double the cost?”
“The only thing ordinarily good about IKEA is that it’s cheap, but now…”
“Even though IKEA has locations there, I think we’re going to hear stories about Korean customers ordering from branches in other countries and having their furniture shipped to them.”
But hey, like we said, market prices get dictated by what people are willing to pay for them. If Korean consumers want to shell out more for IKEA than shoppers elsewhere, that’s their choice, just like coffee drinkers in China can choose to pay more for their Starbucks.
Of course, they also have the option to buy their furnishings elsewhere, until IKEA realizes that maybe it’s time to knock a won or too off their prices.
Source: Otonarisoku
Top image: Naver (edited by RocketNews24)
Insert images: SLR Club (edited by RocketNews24)