Out of the total 6.75 trillion won spent by South Koreans on overseas direct purchases, China accounted for 3.28 trillion won, or about 48%. — China Daily
SEOUL: China became the top overseas direct purchase choice for South Koreans last year, surpassing the United States for the first time, which industry experts attribute to increasing demand from South Korean consumers for cost-effective commodities through Chinese fast-growing cross-border eCommerce platforms.
South Korean shoppers spent 6.75 trillion won (US$5bil) on direct purchases of overseas products online in 2023, up 26.9% year-on-year, according to a report from The Korea Times, citing data from Statistics Korea.
Out of the total 6.75 trillion won spent by South Koreans on overseas direct purchases, China accounted for 3.28 trillion won, or about 48%, marking a whopping 121.2% increase compared to the previous year, the report said.
The United States, which had held the top spot as South Korean shoppers’ favourite overseas direct purchase option, ranked second. It took up 1.85 trillion won of annual transactions, or 27%, a drop of 7.3% year-on-year.
The report also said China’s strength in the overseas direct purchase market is likely to persist for the time being, given that China’s huge consumer market continues to expand alongside the country’s robust and efficient online shopping landscape.
China’s cross-border online marketplaces such as tech heavyweight Alibaba Group’s AliExpress and Temu, which is owned by online discounter PDD Holdings, are gaining popularity among price-conscious South Korean consumers with their cost-effective products and pervasive online promotions, experts said.
AliExpress and Cainiao Group, Alibaba’s logistics arm, launched a seven-day express delivery service for oversized parcels in South Korea in early January.
Consumers in South Korea can receive furniture, home appliances and other large-sized parcels within seven days.
AliExpress announced plans to invest about 100 billion won in South Korea last year in a bid to offer more attractive products and a better cross-border shopping experience for local consumers, as the online retailer has stepped up its push to strengthen its presence in the growing cross-border shopping market.
The company has also launched a new service called “AliExpress Choice” in South Korea, which will provide customers with free shipping, free returns, delivery guarantees and even more affordable prices.
Temu, which offers a wide selection of Chinese-made merchandise, such as clothing, electronics, jewelry, shoes, handbags and cosmetics at competitive prices, made forays into South Korea in July.
Launched in the United States in September 2022, Temu now has a presence in more than 40 countries in North America, Europe, Asia and Oceania.
According to smartphone app market research firm WiseApp, Ali-Express gained the largest number of new users in South Korea in 2023.
AliExpress garnered an average of about 3.71 million new users every month, with 7.07 million monthly active users in South Korea in November, while Temu attracted a monthly average of 3.54 million users.
Zhang Zhouping, an independent analyst who has been tracking the cross-border eCommerce sector for more than a decade, said: “In recent years, Chinese eCommerce platforms have accelerated steps to expand their global footprint via shopping subsidies and launching promotional campaigns, increasing their influence in overseas markets, including South Korea.”
High-quality affordable Chinese products are increasingly favoured by overseas buyers, Zhang said.
“Chinese online retailers need to build their own core advantages in terms of price, service, quality, supply chains and logistics, have a deep understanding about relevant policies in local markets, and comply with local laws and regulations to ensure their brands are reputable,” he said. — China Daily/ANN
