Korean product stores in Ecuador expect a 15% to 75% reduction in consumer prices due to trade agreement with South Korea

Interest in South Korea’s culture, gastronomy, technology, beauty, music and more grew while there were few products available in Ecuador, creating business opportunities that have found a niche market and are now awaiting a trade deal with the Asian country.

Hallyu Store has in its catalog from original albums of Korean music groups to snacks traditional. Lavuu Korean Cosmetics has a variety of cosmetic products. And the K-Market Guayaquil line is mainly for processed food, which, according to the owner, is included in the agreement and thus expects a doubling of imports.

These are the products that will enter with zero duty when the trade agreement between Ecuador and South Korea goes into effect

Not all companies know whether the products they import from South Korea will be included among those that will have a tariff relief, but they hope that their prices will drop between 15% and 75%.

According to the Ministry of Production, Foreign Trade, Investments and Fisheries, 79% of what Ecuador brings from South Korea corresponds to capital goods, inputs and raw materials for production, while 21% is consumer goods. In order to protect sensitive sectors, exemptions have been defined, a total of 594 tariff lines.

According to the National Customs Service of Ecuador (Senae), the fuel is water top 10 products imported from Korea from January to September, followed by cars and in third place polyethylene, polymers, polyacetans – primary forms. The others are:

Ecuador and South Korea completed the pre-signing of a trade agreement

‘Taxes are high on the products we import’

The Hallyu Store – which opened ten years ago – makes four to five imports of around 3,000 albums a year, as it is one of the most sought-after items in its business. With a commercial deal, his manager Yaener Pacheco believes they could add another import to make it one every two months.

Album prices range from $32 to $52, there are even versions that can cost as much as $140, which are bought especially by collectors, and with the deal, according to Pacheco, he hopes to lower the price by about 15 to 20 percent. from the album.

“Taxes are currently high on the products we import,” says the owner of the Hallyu Store, which is organizing the K-Fest festival on November 11 and 12, a space for K-lovers which will be held at Rodolfo Baquerizo Moreno Square, on the Salado waterfront.

When the products arrive in Ecuador – he says – the price increases by approximately 50%, in some cases 70% of their price, in others it can vary even more. He cites as an example glow stick, some official lamps of music groups, which have a different type of tariff and the price increase is about 60%, 80%. The cheapest is 58 dollars, and the most expensive is 150 dollars.

Pacheco explains that customs clearance taxes are around 25% to 40%. As a reference, he states that the CD tariff is 25%, but to that you have to add Fodinfa, ICE, VAT and all of that increases the price by 50%, 60% plus the cost for the end consumer.

‘We have not yet received information about the specific benefit’

At Lavuu Korean Cosmetics, they expect that the tariff can be reduced. “The specific benefit we will achieve has not yet been communicated to us. We have been importing Korean cosmetics for five years, receiving constant support from the Korea Trade and Investment Promotion Agency (Kotra), which is South Korea’s commercial office in Ecuador. We understand that once the benefit is defined for our tariff item, we will be notified,” says the company’s CEO, Dayana Fernández.

The company offers ten brands and more than 50 types of products that are imported for skin care, as well as makeup.

“The imported products make up every step of the Korean skin care routine, starting with facial cleansers, toners, serums, eye contours, creams, sun protection, and also nourishing makeup, like the famous Bb creams etccushions Koreans (liquid makeup with sun protection, anti-aging, anti-pigmentation, etc.),” ​​he points out.

“Yes, we and the end consumer in Ecuador will be favored”

K-Market Guayaquil is currently a store on the line which went on sale last August. Its line of business is processed food, ramen, Korean sweets, snacks, drinks, among others. Its owner, Lee Sun-ho, has indicated that processed food is included in the economic understanding agreement and thus expects to double imports. “We will be privileged, as will the end consumer in Ecuador.”

Lee, who is the son of a Korean father and an Ecuadorian mother, comments that he still does not know the percentage of tariffs that will be reduced, but he believes that according to the experiences of similar countries such as Peru, Colombia, Chile, which have had a trade understanding agreement with Korea for a long time, the reduction will be significant. “We are talking about a 30% to 40% reduction in the final cost that will be significant and will be felt in the pockets of people here in Ecuador who want to buy Korean products.”

The products that are most in demand are instant noodles, Korean ramen, mostly varieties that are not very spicy. He estimates that these products account for approximately 60% of sales.

The products offered by K-Market Guayaquil range from 0.25 to 40 dollars, and it is estimated that with the contract, the products of 40, 30 dollars will drop by half and even 75 percent.

As a reference, he states that the price of instant noodles ranges between 80 and 90 percent of the production price. “Let’s imagine that the initial price of a product there in Korea is 40 to 50 cents, and when it is imported with all the tariffs, it rises to almost $1.”

He also hopes that a line of ingredients, such as soy sauce, chili powder, chili paste, rice vinegar, etc., will be included to reduce the duty, as he comments that these are super important products in Korean cuisine. and they are the most expensive. “What I was able to find out is that processed foods, like soy sauce, chili paste, are among the items that will be reduced in tariffs, so hopefully these products that are important to us will go down in price.”