South Korean e-commerce platforms appear to be regaining strength after facing intense pressure from Chinese competitors. (Image courtesy of Yonhap)
SEOUL, Jul. 1 (Korea Bizwire) – South Korean e-commerce platforms appear to be regaining strength after facing intense pressure from Chinese competitors like AliExpress and Temu last year.
This resurgence comes as concerns over the safety of low-cost Chinese products have risen, and domestic platforms have launched aggressive promotional campaigns to win back customers.
According to data from the app and retail analysis service Wise App for the period of January to May this year, Coupang led with an average of 30,564,130 monthly users. Gmarket and Auction secured the second spot with 8,280,439 users, followed closely by AliExpress with 8,223,910 users.
Qoo10 subsidiaries Tmon, Wemakeprice, and Interpark Shopping came in fourth with 8,016,651 users, followed by 11Street (7,603,891), Temu (7,204,290), and SSG.com/Emart Mall (3,409,630).
While overall user numbers for domestic platforms have decreased slightly compared to the same period last year, recent trends suggest a potential turnaround. Coupang was the only platform to see growth, with a 3.8% increase in users. In contrast, 11Street saw a 17% decrease, while Gmarket and Auction fell by 16.1%.
The data paints a stark picture when compared to the meteoric rise of Chinese platforms. AliExpress saw a staggering 110.9% increase in users during the same period. Temu, which entered the Korean market in July 2023 with just 816,077 users in August, has grown its user base nearly ninefold in less than a year.
AliExpress saw a staggering 110.9% increase in users. (Image courtesy of Yonhap)
However, domestic platforms have shown resilience in recent months. Coupang and Qoo10’s subsidiaries have seen consistent monthly user growth this year. SSG.com and 11Street have also reversed their declining trends, showing increases since March and April, respectively.
Gmarket and Auction, after declining from January to April, saw a boost in May thanks to their “Big Smile Day” shopping festival.
This recovery coincides with a slowdown in growth for AliExpress and Temu. Both platforms peaked in March before experiencing consecutive declines in April and May.
Industry insiders attribute this shift to growing consumer disappointment with Chinese platforms.
“Many consumers who were initially attracted by the ultra-low prices of Chinese e-commerce sites became disillusioned with product quality and delivery, exchange, and refund services,” said one e-commerce industry representative.
“Recent news of carcinogenic substances found in products sold on these platforms has further turned consumers away.”
Korean platforms have also stepped up their game with aggressive promotions. Gmarket and Auction’s “Big Smile Day” event offered benefits worth 100 billion won, attracting industry attention.
Gmarket and Auction, after declining from January to April, saw a boost in May thanks to their “Big Smile Day” shopping festival. (Image courtesy of Yonhap)
This helped increase their user base by over 300,000 in May compared to April. 11Street focused on product selection and pricing for its monthly “11-day Festival,” offering popular home appliances at competitive prices and eye-catching promotions like “100 won deals for round-trip tickets to Hong Kong.”
Qoo10’s three subsidiaries leveraged their parent company’s global e-commerce infrastructure to offer differentiated products and competitive pricing through events like Tmon’s “All-in Day” and Wemakeprice’s “Mega Sale.”
Despite these positive signs, challenges remain for Korean e-commerce companies. AliExpress is preparing a counteroffensive by extending its fee waiver policy for Korean sellers in its “K-Venue” until September and strengthening support for domestic partners.
Meanwhile, Korean platforms, many of which are grappling with chronic losses, may struggle to sustain aggressive marketing strategies.
As one industry insider noted, “While AliExpress and Temu’s positions have been slightly shaken recently, their price advantage remains. Developing strategies that minimize costs while neutralizing the price competitiveness of Chinese e-commerce will be an ongoing challenge for domestic companies throughout the year.”
Ashley Song (ashley@koreabizwire.com)
