FTC to investigate e-commerce industry as China tightens crackdown

Han Ki-jeong, chairman of the Korea Fair Trade Commission, said this at a press conference held at the government building in Sejong City last April. [YONHAP]

South Korea's antitrust regulator will probe the country's cutthroat e-commerce industry to examine market structure and competition as Chinese rivals squeeze domestic companies.
The Fair Trade Commission (FTC) has set up a team dedicated to market research and research, which will be conducted through surveys and interviews with experts and industry participants.
“E-commerce is an area that requires detailed analysis because it is closely connected to people's lives and the business environment is changing rapidly,” the FTC said Monday.
“The e-commerce market continues to grow amidst changes in the competitive structure, including an increase in direct purchases of products from overseas, the entry of global e-commerce businesses, and stronger connections with related industries such as simplified payment transactions.”
The first generation of online retail connected buyers and sellers primarily through open markets and social commerce. This structure has evolved as traditional manufacturers and retailers have expanded their reach to consumers online through fulfillment services.
The FTC's announcement shows that Chinese e-commerce operators such as South Korea's AliExpress, Temu, and Shein are aggressively trying to lure shoppers in large numbers with competitive prices, despite complaints about product quality control. This is a follow-up to the ongoing efforts.

Electronic billboards at South Korean subway stations promote AliExpress [ALIEXPRESS]

According to WiseApp, AliExpress has become the second most used online shopping app among Korean consumers, with 8.18 million monthly active users in the country as of February, an increase of 130% year-on-year. It was followed only by his Coupang with 30.1 million monthly users.
Last year, online shopping transaction value was estimated at 227.3 trillion won ($169.5 billion), up from 209.9 trillion won in 2022 and 190.2 trillion won the previous year, according to data from the Korea Statistics Bureau.
The JFTC stated, “With the advancement of IT technology and the expansion of delivery services based on large-scale logistics infrastructure, the efficiency of the e-commerce market as a whole and the convenience of consumers are improving.'' “There are concerns about fairness for customs and consumers.” The damage is expanding, especially to some e-commerce businesses. ”
CJ CheilJedang, a major food company, Hetburn (instant rice) and its bibigo Mando (Dumplings), partnered with AliExpress after ceasing business with Coupang in 2022 due to disputes over supply and price.
The FTC's investigation will be conducted in three stages, including a review of documents related to foreign e-commerce policies, market analysis, competitive conditions, and revenue by distribution source and platform operator partner.
The results of the study are expected to be published by the end of the year.
Similar market research and surveys were conducted in the UK and Australia.
The FTC recently conducted an on-site inspection of Ali Korea in central Seoul, which handles the company's marketing in South Korea, in response to a spike in customer complaints.

Written by Jin Minji [jin.minji@joongang.co.kr]