Alibaba’s international e-commerce platform AliExpress has expanded in South Korea and Brazil, in addition to Europe. Pictured is an AliExpress locker in Poland in July 2022.
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BEIJING – AlibabaAliExpress’s international e-commerce business AliExpress is spending the equivalent of $7 million to reach consumers in South Korea, the unit told CNBC in an exclusive interview.
AliExpress says it launched a three- to five-day shipping service to South Korea last year, allowing Koreans to buy certain products, especially fashion, from Taobao. It is Alibaba’s main e-commerce site in China.
In total, the business unit said it spent 10 billion won this year in South Korea to lower the cost of its products. The company wants to “make sure we have the best prices,” said Gary Topp, European commercial and marketing director at AliExpress.
This investment aims to tap into a multi-billion dollar market currently dominated by the United States
Online purchases by Koreans from foreign retail sites grew by $1 billion in 2021 to $4.5 billion, with 41% coming from the US, according to an August report by the US International Trade Administration.
“Although in 2020, the United States is ranked number one, but other countries such as China are expanding their presence in the Korean e-commerce market,” the report said, noting that Korean consumers are now buying from more than 30 countries.
From January to September this year, the number of AliExpress app users in Korea increased by 22%, based in Seoul independent data analytics company TDI speak.
That brought monthly active users in South Korea to a record 2.72 million in September, TDI said.
AliExpress says it does not comment on third-party data.
Total cargo volume in South Korea increased by 44% last year, and the number of buyers increased by 50%, Zhang Kaifu, Vice President of Alibaba and General Manager of AliExpress, at a conference in April. The company confirmed the data, not including the amount. GMV measures the total value of sales over a given period of time.
In August last year, AliExpress was one of the top five websites most used by Koreans to buy goods directly from overseas sellers, according to the Korea Consumer Agency, a government agency. . Other sites are AmazoniHerb, eBay and Q0010.
Over the years, AliExpress has focused mainly on reaching the European market. Public disclosure of subsidies focused on helping consumers in Spain, France and other European countries get packages cheaper and faster.
As the company prepares for its big shopping festival in November – the Singles Day shopping event that runs until November 11 – it said it will offer two-day local delivery to customers in Spain and France. This fall, AliExpress started rolling out interest-free installment plans to customers in Europe.
China’s overseas e-commerce promotion
AliExpress, launched in 2010, declined to comment on the contest.
Alibaba said for the quarter ended June 30 that revenue from international trade retail business decreased 3% year-on-year to $1.57 billion mainly due to challenges in the European market, such as the devaluation of the euro against the US dollar and new EU tax regulations.
During the same quarter, the company’s commercial retail business in China fell 2% year-on-year to $20.45 billion. This period was impacted by Covid-related disruptions to logistics and supply chains.
