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dairyairy
Joined: 17 May 2012
Location: South Korea
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 Posted: Sat Oct 20, 2012 4:07 pm Post subject: |
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| alongway wrote: |
| dairyairy wrote: |
| And that includes sales tax from reselling what they bought at Costco. |
I don't know about Korea, but can items be taxed twice like that? I seem to recall back home, that businesses bought items "wholesale" without tax. |
That's because, "back home", there was a clear line of what could be resold and what couldn't be resold, largely because of taxes. In Korea, the smaller stores grab whatever they can wherever they can and resell it. The small stores and restaurants do most of their Costco shopping on weekdays. Again, that's why it's so hypocritical of smaller stores and shops in Seoul to claim that Costco is putting them out of business when Costco doesn't compete with them in any way, and Costco actually is a supplier for many, (meaning hundreds of), small shops and restaurants.
Plus, Costco helps many Korean vendors sell their products to the Korean market. The larger Korean stores are constantly being accused of not playing fair with their suppliers. Having Costco in town gives those vendors another place to sell their products and adds some sense of fairness to the Korean business market. Yet another way Koreans benefit from having Costco in Korea.
Last edited by dairyairy on Sat Oct 20, 2012 4:13 pm; edited 1 time in total |
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alongway
Joined: 02 Jan 2012
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| Posted: Sat Oct 20, 2012 4:12 pm Post subject: |
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| dairyairy wrote: |
| alongway wrote: |
| dairyairy wrote: |
| And that includes sales tax from reselling what they bought at Costco. |
I don't know about Korea, but can items be taxed twice like that? I seem to recall back home, that businesses bought items "wholesale" without tax. |
That's because, "back home", there was a clear line of what could be resold and what couldn't be resold, largely because of taxes. In Korea, the smaller stores grab whatever they can wherever they can and resell it. Again, that's why it's so hypocritical of smaller stores and shops in Seoul to claim that Costco is putting them out of business when Costco doesn't compete with them in any way, and Costco actually is a supplier for many small shops. Plus, Costco helps many Korean vendors sell their products to the Korean market. |
Small businesses back home use Costco as a supplier as well (or at least they used to). I seem to recall paying tax at costco back home though. |
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byrddogs
Joined: 19 Jun 2009
Location: Shanghai
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| Posted: Sat Oct 20, 2012 4:15 pm Post subject: |
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| dairyairy wrote: |
| alongway wrote: |
| dairyairy wrote: |
| And that includes sales tax from reselling what they bought at Costco. |
I don't know about Korea, but can items be taxed twice like that? I seem to recall back home, that businesses bought items "wholesale" without tax. |
That's because, "back home", there was a clear line of what could be resold and what couldn't be resold, largely because of taxes. In Korea, the smaller stores grab whatever they can wherever they can and resell it. Again, that's why it's so hypocritical of smaller stores and shops in Seoul to claim that Costco is putting them out of business when Costco doesn't compete with them in any way, and Costco actually is a supplier for many small shops. Plus, Costco helps many Korean vendors sell their products to the Korean market. |
It seemed to me that many mom and pop's back home bought in bulk at the price clubs. They paid tax on their purchases and charged tax when reselling, so yes, there was a clear line that was followed most likely.
I'm with you on the hypocriticallness of this whole thing in Korea. |
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Stan Rogers
Joined: 20 Aug 2010
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| Posted: Sat Oct 20, 2012 4:18 pm Post subject: |
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[quote="dairyairy"]
| KimchiNinja wrote: |
| Stan Rogers wrote: |
| Quote: |
| Do you work for Costco? |
Indeed, most of you guys sound like a bunch of Costco fan-boys.
I don't like Costco, so I think it's awesome. |
I have saved money from shopping at Costco and I'm willing to bet you would, too, if you are a smart shopper who knows good deals. Are you a smart shopper? |
I did not write what you quoted.
You should think about going back to school. |
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Stan Rogers
Joined: 20 Aug 2010
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| Posted: Sat Oct 20, 2012 4:20 pm Post subject: |
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[quote="atwood"]
| KimchiNinja wrote: |
| Stan Rogers wrote: |
| Quote: |
| Do you work for Costco? |
Indeed, most of you guys sound like a bunch of Costco fan-boys.
I don't like Costco, so I think it's awesome. |
There's no accounting for taste. |
I didn't write what you quoted.
You should think about going back to school too. |
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dairyairy
Joined: 17 May 2012
Location: South Korea
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| Posted: Sat Oct 20, 2012 4:28 pm Post subject: |
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To sum up this morning's economics class, the addition of Costco to the Korean marketplace helps to shift the economic power away from the larger Korean stores and towards consumers, suppliers, small stores and restaurants. Before Costco made such an impact, the uncompetitive nature of the Korean marketplace, with high tariffs and other protective measures, gave all of the market power to the large stores. The Mayor of Seoul accuses Costco of being an economic monster but other forces had already created those monsters. Costco's pro-consumer policies help to create competition which is vital to the efficient free market system. There should be gratitude for Costco's positive impact and consumers, by and large, seem to understand this and have responded by crowding Costco stores and setting sales records.
Obviously some will resent Costco for "cutting in on their action" and will use their domestic political power to squeeze Costco as much as possible. But the Korean middle and upper classes have raised their level of expectation about available products and prices and, odds are, Costco will weather this storm with the support of the Korean shoppers. We, as foreigners in Korea, cannot vote in Korean elections but we can "vote" in the Korean marketplace by shopping at Costco. |
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Stan Rogers
Joined: 20 Aug 2010
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| Posted: Sat Oct 20, 2012 4:37 pm Post subject: |
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| dairyairy wrote: |
To sum up this morning's economics class, the addition of Costco to the Korean marketplace helps to shift the economic power away from the larger Korean stores and towards consumers, suppliers, and small stores and restaurants. Before Costco made such an impact, the uncompetitive nature of the Korean marketplace, with high tariffs and other protective measures, gave all of market power to the large stores. The Mayo of Seoul accuses Costco of being an economic monster but other forces had already created those monsters. Costco creates competition which is vital to the efficient free market system. There should be gratitude for Costco's positive impact and consumers, by and large, seem to understand this and have responded by crowding Costco stores and setting sales records.
Obviously some will resent Costco for "cutting in on their action" and will use their domestic political power to squeeze Costco as much as possible. But the Korean middle and upper classes have raised their level of expectation about available products and prices and, odds are, Costco will weather this storm with the support of the Korean shoppers. We, as foreigners in Korea, cannot vote in Korean elections but we can "vote" in the Korean marketplace by shopping at Costco. |
You forgot to mention that Costco Korea is in bed with Samsung. |
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dairyairy
Joined: 17 May 2012
Location: South Korea
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| Posted: Sun Oct 21, 2012 4:51 am Post subject: |
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Looks like a letter about the subject in the Korea Times does a good job in describing the situation.
http://www.koreatimes.co.kr/www/news/opinon/2012/10/161_122751.html
| Quote: |
10-21-2012 16:13
Rule of law in business
The recent Gestapo tactics used by the Seoul Metropolitan Government to harass and disrupt business at Costco Wholesale is disgraceful. Sadly, these anti-foreign measures of bullying foreign companies that are successful in the Republic have been standard procedure in Korea. However, as they expand their globalization rhetoric and continue to seek foreign direct investment, Korea�s hypocritical practice needs come to an end, because they aren�t fooling anyone, anymore.
To be clear, everyone in business is aware of the �Korea Discount,� this unlevel playing field in the Korean market from corruption to protectionism is preventing Korea from taking the next step in their advancement in this global economy. In the past, Carrefour, the National Cattlemen's Beef Association, Wal-Mart, Lone Star, Standard Chartered, and Apple have had to fend off these attacks. Today, Costco Wholesale is the target, and Korea is showing its true colors with the orchestrated effort by the government, labor organizations, and the media to attack these non-Korean entities.
In an election year, it is no surprise to see this type of shameful propaganda being used to galvanize support through protectionist rhetoric. I only wish the people of Korea would recognize it for what it is and finally demand for it to end.
Make no mistake; helping mom-and-pop stores is not the issue. They have been suffering for a long time, because they are dinosaurs in a modern economy. Their business model is flawed, as rational people don�t want to buy inferior produce or the same products at grossly inflated prices. Most of these shops are rundown, dirty, and cluttered. The service is subpar, and consumers don�t actively choose to shop there. They shop there when they are in a pinch.
Creative destruction of these mom and pop stores is inevitable. It is the nature of things in a capitalist economy. If the Seoul Metropolitan Government really wanted to help these small business owners, they would either help them become more competitive or they would help them to transition into an economically feasible business.
As it stands, they have done neither, because mom-and-pop stores are not the issue. It is the red herring.
Sunday closers are just an inconvenience to customers that won�t solve the fundamental flaw of mom-and-pop stores. Moreover, if due diligence had been done, the Seoul Metropolitan Government would have discovered that consumers who shop at Costco Wholesale don�t care to shop at mom-and-pop stores.
The real issue is the jealousy and resentment of Costco Wholesale�s success in Korea. Though they have tried, unsuccessfully, to copy it with Vic Market, Korea has been unable to compete with Costco�s quality and selection of products and services, and their commitment to the lowest possible prices.
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alongway
Joined: 02 Jan 2012
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| Posted: Sun Oct 21, 2012 5:20 am Post subject: |
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| It would have far more impact if it was written in Korean and run in a Korean language paper. |
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nautilus
Joined: 26 Nov 2005
Location: Je jump, Tu jump, oui jump!
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| Posted: Sun Oct 21, 2012 8:35 am Post subject: |
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| alongway wrote: |
| It would have far more impact if it was written in Korean and run in a Korean language paper. |
I've tried sending translated stuff to the Korean press. Joong-ang ilbo etc. They're usually not interested in the opinions of foreign expats, particularly criticism. They're conservative papers towing the government line. |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Sun Oct 21, 2012 5:26 pm Post subject: |
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| nautilus wrote: |
| alongway wrote: |
| It would have far more impact if it was written in Korean and run in a Korean language paper. |
I've tried sending translated stuff to the Korean press. Joong-ang ilbo etc. They're usually not interested in the opinions of foreign expats, particularly criticism. They're conservative papers towing the government line. |
On top of that it's a Seoul city ordinance, which the national government can do little about. Hopefully the next president isn't aligned with the the Seoul city government. |
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KimchiNinja
Joined: 01 May 2012
Location: Gangnam
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| Posted: Sun Oct 21, 2012 6:50 pm Post subject: |
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| CentralCali wrote: |
| So, you don't like Costco and thus that means it's okay for a government to unfairly penalize them? |
Yes.
I also do not care about the outcomes of what governments or corporations do or do not do, so this all makes little difference to me. But the absence of Costco would be better for the human race. |
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KimchiNinja
Joined: 01 May 2012
Location: Gangnam
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| Posted: Sun Oct 21, 2012 6:53 pm Post subject: |
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[quote="dairyairy"]
| KimchiNinja wrote: |
| Stan Rogers wrote: |
| Quote: |
| Do you work for Costco? |
Indeed, most of you guys sound like a bunch of Costco fan-boys.
I don't like Costco, so I think it's awesome. |
I have saved money from shopping at Costco and I'm willing to bet you would, too, if you are a smart shopper who knows good deals. Are you a smart shopper? |
No, I definitely don't care about being a "smart shopper". |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Sun Oct 21, 2012 9:23 pm Post subject: |
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| dairyairy wrote: |
Looks like a letter about the subject in the Korea Times does a good job in describing the situation.
http://www.koreatimes.co.kr/www/news/opinon/2012/10/161_122751.html
| Quote: |
10-21-2012 16:13
Rule of law in business
The recent Gestapo tactics used by the Seoul Metropolitan Government to harass and disrupt business at Costco Wholesale is disgraceful. Sadly, these anti-foreign measures of bullying foreign companies that are successful in the Republic have been standard procedure in Korea. However, as they expand their globalization rhetoric and continue to seek foreign direct investment, Korea�s hypocritical practice needs come to an end, because they aren�t fooling anyone, anymore.
To be clear, everyone in business is aware of the �Korea Discount,� this unlevel playing field in the Korean market from corruption to protectionism is preventing Korea from taking the next step in their advancement in this global economy. In the past, Carrefour, the National Cattlemen's Beef Association, Wal-Mart, Lone Star, Standard Chartered, and Apple have had to fend off these attacks. Today, Costco Wholesale is the target, and Korea is showing its true colors with the orchestrated effort by the government, labor organizations, and the media to attack these non-Korean entities.
In an election year, it is no surprise to see this type of shameful propaganda being used to galvanize support through protectionist rhetoric. I only wish the people of Korea would recognize it for what it is and finally demand for it to end.
Make no mistake; helping mom-and-pop stores is not the issue. They have been suffering for a long time, because they are dinosaurs in a modern economy. Their business model is flawed, as rational people don�t want to buy inferior produce or the same products at grossly inflated prices. Most of these shops are rundown, dirty, and cluttered. The service is subpar, and consumers don�t actively choose to shop there. They shop there when they are in a pinch.
Creative destruction of these mom and pop stores is inevitable. It is the nature of things in a capitalist economy. If the Seoul Metropolitan Government really wanted to help these small business owners, they would either help them become more competitive or they would help them to transition into an economically feasible business.
As it stands, they have done neither, because mom-and-pop stores are not the issue. It is the red herring.
Sunday closers are just an inconvenience to customers that won�t solve the fundamental flaw of mom-and-pop stores. Moreover, if due diligence had been done, the Seoul Metropolitan Government would have discovered that consumers who shop at Costco Wholesale don�t care to shop at mom-and-pop stores.
The real issue is the jealousy and resentment of Costco Wholesale�s success in Korea. Though they have tried, unsuccessfully, to copy it with Vic Market, Korea has been unable to compete with Costco�s quality and selection of products and services, and their commitment to the lowest possible prices.
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Sorry, but they lost me at "Gestapo Tactics".
And shouldn't a country do its utmost to promote wealth generation by the citizens of the country, not supporting some abstract notion about "fair play in trade", even if that means unfairly penalizing foreign companies?
I don't want my government (American or Korean) to offer a level playing field in the name of somewhat cheaper consumer goods. I want it to offer an unlevel playing field to promote employment and wealth generation in my country of residence.
I'll start to cast stones at Korea over this the second people stop whining over China's unfair trade practices. |
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dairyairy
Joined: 17 May 2012
Location: South Korea
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| Posted: Mon Oct 22, 2012 12:50 am Post subject: |
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Steelrails, I can tell you haven't been paying attention and reading my posts but this boils down to too much intervention into the consumer market by the Seoul city government. Costco is a positive force in the economy for many reasons and if you want to have an active and healthy economy then you must offer consumers the best products at the lowest prices. That's what Costco does, aka "secret of Costco's success", and that helps consumers stretch their spending money. Costco also gives Korean suppliers, who are also some small business owners, another option for selling their products and produce. That helps them get better prices for their goods.
Finally, Costco helps Korean shopowners and restaurants by offering products they can use in their businesses to make larger profits. The only people who should oppose Costco's entry into the local marketplace are the other large stores who would rather have no competition so they can charge higher prices and pay less to their suppliers. It's their political influence that is bringing the Mayor of Seoul into this battle of stores in such a heavyhanded way. |
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