Calls are intensifying for policies to shield domestic industries and consumers from what is seen as an onslaught by the global e-commerce behemoths. (Image courtesy of the Korea Internet Corporations Association)
SEOUL, Mar. 22 (Korea Bizwire) – As Chinese e-commerce giants like AliExpress and Pinduoduo make deeper inroads into South Korea’s online shopping market, calls are intensifying for policies to shield domestic industries and consumers from what is seen as an onslaught by the global e-commerce behemoths.
“With the growth of South Korea’s online shopping market already reaching its limits, the crisis facing domestic companies is worsening due to the offensive by Chinese e-commerce platforms,” Jung Yeon Sung, a professor at Dankook University, said at a seminar organized by the Korea Internet Corporations Association on Wednesday.
Jung argued that while the United States is addressing the rise of Chinese e-commerce from both economic and security perspectives, South Korean companies lack such strategic support, leaving them exposed. He urged measures to bolster consumer protections, enhance the brand value of South Korean manufactured goods, and reinvigorate domestic online shopping channels.
“Regulation could boomerang back on our companies,” Jung cautioned, advocating a policy shift toward supporting rather than restricting local platforms. He proposed establishing overseas sales centers to aid small businesses and requiring Chinese e-commerce firms to locate servers in South Korea to prevent consumer data from leaving the country.
The Alibaba Group, parent company of the online shopping platform AliExpress, has announced its intention to set up an integrated logistics center in South Korea by the end of this year. (Image courtesy of AliExpress)
During a panel discussion, experts suggested creating a mechanism to immediately block IP addresses of potentially harmful products sold on Chinese platforms, underscoring the urgency of enforceable policies.
Shin Ji Hye, a law professor at Hankuk University of Foreign Studies, noted that domestic firms bear substantial regulatory compliance costs for consumer protection and service operations, undermining their ability to compete on price with Chinese rivals.
Jang Juneyoung, an attorney at the Sejong law firm, said the efficacy of investigations and data disclosures for violations by foreign firms lags domestic companies, calling for measures to ensure equal accountability and transparency.
Jeong Eun-ae, a research fellow at the Korea Small Business Institute, emphasized the need for strategies to help small South Korean merchants expand globally and integrate online platforms with physical marketplaces to create synergies. She also stressed the importance of raising consumer awareness about potential issues.
Pointing to concerns about the fallout from the Platform Competition Promotion Act passed last year, Shin Soon-kyo, policy director of the Korea Online Platform Business Association, revealed that sales for domestic platform merchants have declined 10 to 15 percent as Chinese e-commerce firms tighten their grip on the market at an alarming pace.
Ashley Song (ashley@koreabizwire.com)
