China’s AliExpress eyes expansion in Korea

AliExpress, an online direct purchase platform owned by Chinese e-commerce giant Alibaba Group, is considering whether to set up a massive logistics center in South Korea in a sign of business expansion, according to industry sources on Tuesday.

“Given the extent of AliExpress’ expansion here, the company would need at least five logistics centers to manage products upon their arrival in Incheon (the nation’s main international gateway),” an industry source told The Korea Herald on condition of anonymity, adding that logistics centers are usually operated under long-term rental contracts.

“It remains to be seen whether the company is planning such a huge investment for the Korean market at this point.”

More concrete plans for the new facility are likely to be unveiled next month when the company holds its first press conference in Seoul.

Following its official debut in Korea in 2018, AliExpress has enhanced its service quality, including setting up a customer center exclusively for Korean customers in November last year. Over the years, its delivery time has reduced from one to two weeks to three to five days.

Currently, CJ Logistics, the nation’s largest shipping company, handles the shipping of AliExpress products in Korea. This year alone, the transaction volume has more than doubled from 3.46 million boxes in the first quarter to 9.04 million boxes in the third quarter.

Sources say Coupang, the nation’s largest e-commerce platform operator, may face direct competition from its Chinese rival’s bigger presence here.

According to the latest government data, Coupang occupies the largest share of the nation’s e-commerce market with 24.5 percent, followed by Naver with 23.3 percent and Shinsegae Group with 10.1 percent.