AliExpress boosts e-commerce presence amid growing distrust in gov't regulations

Survey shows unmet needs of consumers, sellers

By Ko Dong-hwan

AliExpress is broadening its presence in Korea's online commerce sector by launching innovative trading platforms for sellers of Korean products.

The Chinese company’s platforms, which are dedicated to Korean sellers such as K-Venue and Global Selling, came as the Korean government’s regulations on foreign e-commerce platforms have drawn criticism from consumers and sellers for not prioritizing their opinions. In response, AliExpress is enhancing its services to better cater to online shoppers and vendors in Korea.

A recent survey by the Korean Association of Policy Studies reveals a shift among Korean consumers toward foreign online platforms, while local vendors express increasing concerns about market monopolization by a few dominant Korean operators.

In a survey of 1,500 respondents aged 20 and older who made direct purchases from foreign online shopping platforms — including AliExpress — in the past three months, 84 percent cited "concerns about financial burden" as the primary reason for using these platforms.

The respondents also expressed their concerns about the government's newly introduced monitoring and regulations targeting Chinese online platforms, now known as C-commerce.

Additionally, 28.5 percent felt the regulations overlook the actual needs of users of foreign online shopping platforms. Over 21 percent expressed concerns that, despite the intention behind the new regulations to curb the growing market share of foreign operators in Korea, they may inadvertently lead local shopping platforms to raise product prices.

The survey revealed that domestic users of foreign platforms want the Korean government to cooperate with the platforms instead of launching punitive regulations against them.

Over 67 percent of the respondents said the Korean authorities should form partnerships with the foreign platforms, while 53.1 percent said they want the government to help domestic online shoppers better navigate through the platforms by sharing more information and related policies.

Concerns about monopolies held by a few major online platform operators were prominent among respondents, with over 83 percent expressing worry about the issue. They highlighted questionable practices by Korean e-commerce giants, including the abuse of their tenant vendors, who are primarily small to medium-sized enterprises (SMEs) (33.8 percent), raising product prices or membership fees without restraint (33.7 percent) and contributing to an overall reduction in market diversity (15.7 percent).

“The survey shows an untrustworthy aspect of the Korean government trying to control foreign e-commerce platforms. It reflects the authority should not only consider sellers but also consumers’ needs when designing the regulations,” an industry official said.

“The government, instead of protecting the domestic e-commerce giants, should realize that the companies’ monopolies are fueling the inconvenience of domestic shoppers and vendors. Countermeasures are required now.”

AliExpress, the e-commerce division of Alibaba Group, has been investing in the Korean market since last year to enhance its influence among both consumers and vendors in the country.

K-Venue is the company’s new online platform for vendors in Korea, featuring categories such as food, beauty, electronics, home decor, fashion, and child care. Launched in October 2023, it has attracted over 10,000 sellers so far. From October 2023 to July this year, the number of new tenant vendors each month jumped by an average of 148 percent. Notably, more than 60 percent of the top 50 sellers are small to medium-sized enterprises.

AliExpress recently launched Global Selling, a platform dedicated to K-Venue vendors to launch their products into global markets overseen by Alibaba Group. To support the vendors selling in the United States, Spain, France and Japan, the new platform has frozen usage fees, offers AI-based translation services and provides expedited overseas shipping and bill payment.

“The expanding global e-commerce industry not only offers consumers broader and more affordable choices but also raises concerns about consumer security and the online trading environment and fair trades,” an AliExpress official said.

“It is essential to maintain a balanced view among consumers, sellers, service providers, and regulators.”