[NEWS IN FOCUS] AliExpress captures Korean market

AliExpress Korea has appointed actor Don Lee as its first brand ambassador. [ALIEXPRESS KOREA]

China has overtaken the United States to take the top spot in South Korea's overseas direct purchasing market for the first time since 2014. This rapid growth is due to the relentless expansion of Chinese online shopping giants such as AliExpress and Temu.
AliExpress, in particular, entered the domestic market in 2018 armed with affordable products and 5-day free shipping. The company recently established a dedicated section for Korean products with zero sales commissions, and has successfully attracted major Korean household goods manufacturers such as LG House & Healthcare and Aegyung Industries.
As Chinese e-commerce companies step up their efforts, domestic e-commerce companies such as Naver Shopping, G Market, 11 Street, and Coupang are also on high alert. There are concerns that weakness among local sellers could impact sales and transaction volumes on open market platforms, which account for a significant portion of overall revenue.

AliExpress Korea announces recruitment of Korean sellers for K-Venue section [ALIEXPRESS KOREA]

Super low cost, free shipping and free returns
AliExpress announced Wednesday that it is recruiting Korean sellers for a segment called “K-Venue.” The move underscores the platform's efforts to attract small and medium-sized businesses as well as established brands.
Launched last October, K-Venue is a tab dedicated to selling Korean products. Free shipping, free returns, and delivery nationwide in just 3 days.
More than 20 companies have participated in this shopping tab as of the end of January, including well-known companies such as LG Household & Healthcare, as well as major food and beverage companies such as Lotte Chilsung Beverages and Samdasui. ing.
The surge in entries was driven by AliExpress' attractive incentives for Korean sellers, such as waiving listing and selling fees (which typically amount to about 10% of sales on other platforms such as Coupang and Gmarket) until the end of March. ing.
“For a platform like ours, it's extremely important to offer a variety of brands to our customers,” said a Gmarket official. “We are paying particular attention to AliExpress's strategy.” [like not levying sales commissions]It may tempt Korean sellers. ”
AliExpress also encourages sellers to participate in major sales events such as “Double 11” in November and “Anniversary Sale” in March, providing opportunities to increase revenue.

Products sold on AliExpress [SCREEN CAPTURE]

China overtakes US in global buying spree
Amid the economic downturn, a Chinese shopping app that uses ultra-low prices as its weapon has successfully capitalized on sluggish consumer sentiment in South Korea and established a solid foundation for growth.
Park Jin-ah, a 27-year-old teacher from Seoul, is a frequent shopper on AliExpress, often buying accessories for her mobile phone.
Park said, “I often buy items such as iPhone cases, plastic bags, and organizers on AliExpress because they are much cheaper than in Korea and the quality is not bad. I don't think I bought it,” he said. The price was so low that I wasted my money. ”
According to data from the Korea Statistical Office, online direct overseas purchases increased by 26.9% last year, reaching a total of 6.8 trillion won ($5.1 billion). Of this amount, direct overseas purchases by Chinese people increased by 121.2% to 3.9 trillion won, making it the top country for the first time.
AliExpress emerged as the app with the fastest rise in domestic users last year, increasing its average monthly user count by 3.71 million from January to November last year, according to a report by market tracker Wise App, Retail and Goods. Temu, another Chinese e-commerce platform, secured his second place.
AliExpress currently occupies the third place among Korean shopping apps, with more than 7.17 million monthly active users, behind Coupang and 11Street.
Chinese e-commerce platforms are expanding their user base through aggressive marketing strategies, with AliExpress announcing a 100 billion won investment in the Korean market and partnering with the country's largest logistics company CJ Logistics to expand into South Korea this year. We are exploring the possibility of establishing a logistics hub. .
“From a market perspective, the Korean e-commerce environment is highly competitive and there is no single dominant player,” Han Song-i, senior manager of AliExpress Korea, said at a press conference on December 6. Ta.

South Korea has indefinitely postponed the introduction of the Platform Competition Promotion Act, a bill aimed at regulating digital platform giants such as Google, Apple, Naver, Kakao and Coupang, after facing strong opposition from industry players. The bill classifies these businesses as “market-dominant businesses'' in order to proactively prevent unfair practices such as cross-selling and exclusive contracts.[JOONGANG PHOTO]

tilted stadium
Local e-commerce stakeholders in South Korea see the rapid expansion of Chinese e-commerce platforms to include Korean sellers as a “terrifying threat.”
“The aggressive penetration strategy of their Chinese peers, backed by their financial power…not only weakens domestic competitors, but also takes a toll on small and medium-sized enterprises, especially with their unbeatable pricing strategies,” South Korea said. An official from the e-newspaper said. A commerce platform that requested anonymity.
There are also concerns that the government's platform competition promotion law is biased and that domestic companies may be unfairly targeted.
The core of this law revolves around identifying dominant players based on metrics such as revenue, market share, and number of users, with the aim of preemptively regulating them. However, it has proven difficult for the Fair Trade Commission (FTC) to accurately assess the revenue generated by foreign companies operating within South Korea's borders.
“Although the FTC maintains that the platform law applies universally to both domestic and foreign companies, data on foreign platforms is not public in South Korea, creating an obstacle to effective regulatory enforcement. '' said a South Korean platform operator official.

Written by Seo Ji-eun [seo.jieun1@joongang.co.kr]