The number of AliExpress app users in January surged to 7.17 million from 3.36 million the previous January. (Image courtesy of AliExpress)
SEOUL, Feb. 16 (Korea Bizwire) – The rapid penetration of Chinese e-commerce platforms like AliExpress and Temu, known for their ultra-low-priced products, into the South Korean market has prompted the government to take action.
Concerns are growing that the domestic market for everyday consumer goods, including household items and clothing, could become dominated by “Made in China” products, potentially overshadowing local e-commerce giants such as Coupang and Naver.
In response, the Ministry of Trade, Industry, and Energy convened a meeting with key players in the e-commerce sector on February 14 in Seoul. The gathering saw the participation of major domestic e-commerce firms, including Coupang, Naver, 11Street, GMarket, and SSG.com, signaling a united front between the government and private sector against the Chinese e-commerce invasion.
The meeting is seen as a starting point for collective efforts to address the challenges posed by Chinese e-commerce platforms, which have been making significant inroads since AliExpress and Temu entered the Korean market in November 2018 and July of last year, respectively.
Initially, AliExpress did not attract much attention due to long shipping times. However, as both companies expanded their logistics networks throughout China, reducing delivery times to Korea, their competitive pricing began to attract Korean consumers.
Data from app market research firms WiseApp and Retail Goods show a dramatic increase in user engagement with these platforms.
Temu’s app users skyrocketed from 520,000 in August of last year to 5.71 million in the last month. (Photo: a screenshot from Temu’s official webpage)
The number of AliExpress app users in January surged to 7.17 million from 3.36 million the previous January, while Temu’s app users skyrocketed from 520,000 in August of last year to 5.71 million in the last month, posing a threat to the second-largest domestic e-commerce platform, 11Street, with 7.59 million users.
The success of Chinese e-commerce in South Korea hinges on trustworthiness, as the market becomes increasingly competitive.
While some local manufacturers welcome the intensified competition and expanded distribution channels that AliExpress and Temu bring, there is concern that continued growth could destabilize not only domestic e-commerce but also the broader ecosystem of small and medium-sized enterprises.
This is due to the potential for Chinese low-cost consumer goods and apparel to outsell domestic products, putting price-competitive local businesses at risk.
Industry insiders argue that the future growth of Chinese e-commerce in South Korea will depend on the ability of Chinese companies to establish trust.
The persistent issue of counterfeit goods sold by Chinese platforms, coupled with their low-price strategy, may limit their influence in the Korean market without addressing these fundamental concerns.
Moreover, compared to domestic platforms, Chinese e-commerce services lag in customer support, such as returns and refunds, which are crucial areas for improvement.
An e-commerce industry representative highlighted the risks associated with direct imports from Chinese platforms, noting that most of these products are not subject to Korea’s safety certification (KC) requirements, with the potential for consumer harm from uncertified low-cost or counterfeit products a significant concern that has yet to be addressed.
Ashley Song (ashley@koreabizwire.com)
