Consumers finding smartphones for less online

Buying the latest Galaxy smartphone from overseas is now about 300,000 won ($278) cheaper than buying it from a local store, data from online smartphone retailers showed.

As prices of devices locally have gone up since the government on Oct. 1 implemented a law to cut subsidies to even out benefits to consumers, an increasing number of people are purchasing smartphones online from overseas.

Under the law, even if consumers buy a phone online, they can still receive a 12 percent monthly discount on a two-year contract at any of the three major mobile carriers.

As people become more interested in finding a deal on a smartphone overseas, major online open markets also are selling devices through direct purchase.

Korean online smartphone market Goodmobile is selling the Galaxy S5 for 618,000 won through direct purchase, which is 248,800 won cheaper than its domestic price. The market is also selling the Galaxy Note 3 for 588,000 won, 292,000 won cheaper than the local price, and the LG G3 for 595,000 won, 304,800 won cheaper than at local stores.

Goodmobile said it would be selling some of the most popular smartphones for the next month.

“In about a month, on Dec. 4, the Radio Waves Act will be revised to require all smartphone retailers to pass the government’s electromagnetic compatibility (EMC) assessment,” said Park Jong-il, CEO of Goodmobile.

“It costs 30 million to 40 million won for a smartphone model to get certified for its EMC and there are many other difficulties... So when the new law takes effect, it will be difficult to purchase smartphones from overseas.”

According to the nation’s largest online open market GMarket, sales of Xiaomi’s Redmi Note, Sony’s Xperia Z3, Blackberry’s Q10 and Apple’s iPhone 6 through direct purchases abroad tripled in the first week of October compared to the same period in September.

Samsung’s Galaxy J, the Japanese model of the S3, also has been popular through direct purchases because it costs about 370,000 won, about half the domestic price of the S3.

Those who purchase phones online can get a 12 percent monthly discount on a two-year contract at one of the three major mobile carriers - SK Telecom, KT and LG U+ - in accordance with the Mobile Device Distribution Improvement Act.

For example, a consumer who purchases Xiaomi’s Redmi Note at GMarket for 250,170 won and then subscribes to a 60,000 won monthly plan, will get a 15,000 won discount and an additional 12 percent discount each month.

The new mobile act also has boost ed used phone sales.

According to online market 11st, sales of secondhand smartphones shot up 217 percent from Oct. 1 through Oct. 28 compared to the same period last year.

At 11st, a used Galaxy S3 costs 200,000 won and a Vega Iron is 160,000 won.

BY KIM JUNG-YOON [kjy@joongang.co.kr]