Alibaba's AliExpress, PDD-owned Temu face supply chain difficulties in South Korea amid swift enterprise expansion

This short article was very first posted by The Korea Occasions in a partnership with the South China Early morning Put up.

China’s e-commerce giants are now the swiftest-rising online platforms for Korean shoppers, but they are still grappling with complications of extended supply time and unstable merchandise high-quality, according to shoppers and retail business officials.

Alibaba Group Holding and PDD, two of the major e-commerce companies in China, have been aggressively growing their foothold in South Korea, supplying prices as small as US$1 for some smaller gizmos on their abroad browsing platforms AliExpress and Temu, respectively. Alibaba owns the South China Morning Write-up.

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Introduced in South Korea in 2018, AliExpress saw its regular monthly energetic users surpass 7 million as of previous November, nearly doubling the amount recorded a yr previously, in accordance to cell current market investigation business WiseApp. Temu, which begun Korean functions in July, averages 3.5 million users per thirty day period. WiseApp rated the two Chinese platforms as the fastest-expanding applications in Korea in 2023.

But on the flip aspect, some shoppers in Korea keep on being cautious about changing local on the web retail web sites, this kind of as Coupang and Gmarket, owing to the Chinese platforms’ provide chain troubles that incorporate extensive supply time and unstable merchandise good quality.

South Korea was rated as the world’s fourth-premier e-commerce industry with a projected earnings of US$139.8 billion in 2023, according to a report from on-line database ECDB. Photo: Shutterstock alt=South Korea was rated as the world’s fourth-biggest e-commerce current market with a projected income of US$139.8 billion in 2023, according to a report from online database ECDB. Image: Shutterstock>

Lawrence Woo, a 38-yr-outdated place of work worker in Seoul, started off applying AliExpress a year back following he was lured by the platform’s very low costs. Woo located, for case in point, a laptop computer stand on AliExpress that expenditures 30,000 received (US$23) and arrives with totally free shipping, which was a deal all around 50 for each cent much less expensive than people supplied by community retail sites.

Continue to, Woo reported he was puzzled about the shipping and delivery time of items he acquired on AliExpress. For occasion, it took AliExpress two months to deliver a smartphone camera protector movie that he bought last autumn.

“The delivery time is too lengthy,” Woo stated. “I tried using to cancel the purchase, but the consumer services was not performing.”

On Temu, product or service shipping instances would array from six to 20 times, according to the Chinese budget buying app’s web site.

By comparison, Korean e-commerce big Coupang is capable of shortening shipping and delivery moments to in just a day by its signature Rocket Shipping and delivery provider.

Both of those AliExpress and Temu function with domestic logistics company companies these as CJ Logistics Corp, the oldest and largest parcel shipping agency in South Korea.

“It is dependent on [these companies’] source chain,” said Zhuang Shuai, founder and chief analyst at Chinese current market consultancy Bailian. “For instance, no matter whether the sellers are neighborhood retailers or Chinese retailers, and no matter whether the platforms have their own warehouses.”

Zhuang indicated that Chinese shopping platforms facial area both equally plan and cultural limitations in their abroad expansion. “Just like how Amazon did not be successful in China, it is also not easy for Chinese providers to function overseas,” he explained.

Inspite of those people challenges, both of those AliExpress and Temu have pushed initiatives to boost source chain effectiveness in South Korea.

The Alibaba unit past March launched a new service identified as AliExpress Selection that aims to offer Korean consumers with “supply assures and far more affordable prices”, touting up to a “three-working day supply window”. AliExpress also expanded the potential of its warehouses in Weihai and Yantai, two cities in eastern Shandong province, which is near to the Korean peninsula.

Prolonged-time AliExpress consumer Lee Ye-seul, a 35-12 months-previous resident of Seoul, stated the platform’s supply speed has enhanced, pointing out that some merchandise she recently requested arrived in just 4 times of her on the internet buy. Nevertheless, she lamented an additional major dilemma: copycat layouts broadly seen on Chinese e-commerce platforms.

Lee indicated that there were many retailers on AliExpress marketing smartphone scenarios designed with people from popular Korean or Japanese makes, this sort of as Sanrio. “It truly is hard to explain to if the products you might be buying is plagiarised or an first style,” she said.

Echoing Lee’s look at on copycat products, business office worker Woo claimed it was rough to figure out the authenticity of branded solutions on Chinese buying platforms. He prompt that these platforms established up a “patrol procedure” to punish counterfeiters.

Merchandise acquired from AliExpress are “unknowingly circulating” on Korean second-hand profits web pages as counterfeits, according to Kang Hyoung-goo, a professor of finance at Hanyang University in Seoul.

“It is a stumbling block to expanding world wide outreach by means of K-vogue exports,” Kang claimed.

South Korea has grow to be a single of the big battlefields for Alibaba and PDD, as each depend on abroad markets to keep their organization momentum amid sluggish consumer progress and weak spending in their house current market.

Korea was ranked as the world’s fourth-greatest e-commerce market with a projected income of US$139.8 billion in 2023, adopted by Japan, according to a report from on the net databases ECDB.

Whilst Chinese platforms have paved the way for many Korean people to achieve immediate obtain to China-made goods at really low costs, Woo and Lee both indicated that these on line marketplaces would not turn out to be their primary locations for procuring.

“I will hold making use of these kinds of platforms, but I would rather convert to Coupang or Naver Purchasing for each day requirements or trend objects,” Woo explained.

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