SEOUL: South Korea's privacy watchdog on Thursday (March 7) said it would be slowing down the consumption of major overseas shopping platforms, following a surge in South Korea's use of Chinese e-commerce platforms such as Alibaba's AliExpress and Temu. announced that it is investigating its data practices.
The Personal Information Protection Commission has been restricting foreign e-commerce platforms since last month after last year's parliamentary audit raised questions about data handling by platforms such as AliExpress and PDD Holdings' Temu, an international discount e-commerce platform. They announced that they are investigating.
The committee said in a statement that it is checking the appropriateness of personal information processing policies, overseas transfers, and security measures, and will take action if there are violations of South Korean law.
The announcement comes after South Korea's antitrust regulator, the Fair Trade Commission (FTC), sent inspectors to the offices of AliExpress' South Korean unit last week to investigate the platform's consumer protection practices, Yonhap News reported. This is based on a survey conducted.
The FTC, Alibaba, and Tem did not respond to requests for comment.
According to statistics, South Koreans' e-commerce transactions from China (including platforms such as AliExpress and Temu) will increase by 121% year-on-year to 3.3 trillion won (US$2.48 billion) in 2023, surpassing overseas e-commerce transactions. Data from South Korea accounted for almost half of the total.
According to Daishin Securities analyst Lee Ji-eun, AliExpress, which launched in South Korea in 2018, has invested about 100 billion won to expand its business in the country in 2023.
Investors are watching to see whether the company's and other Chinese e-commerce platforms' rapid user growth in South Korea will have an impact on existing players such as Naver Shopping and Coupang, but more quickly. Delivery and easy returns for local businesses could keep the Chinese platform's price competitive influence. Bay, Seoul-based analysts said:
