Steeper Growth Than Native Platforms
Primarily Distributing Affordable Chinese Products
"Advantageous as Cross-Border Shipping Develops"
AliExpress, Temu, Shein….
It is truly the 'assault of Chinese apps.' China-based shopping platforms, leveraging price competitiveness, are rapidly increasing their recognition in South Korea. These apps are already massive platforms proven in the global market and are showing steep growth compared to native platforms domestically.
According to app service analysis services WiseApp, Retail, and Goods (WiseApp), as of August, the number of domestic Temu users reached 510,000, and Shein users reached 550,000. Shein's figure represents a 570% increase compared to the same period last year.
Temu is an e-commerce platform under China's Pinduoduo. It mainly distributes consumer goods produced locally in China and competes with disruptive price competitiveness. Meanwhile, Shein is a China-based online fashion shopping mall headquartered in Singapore.
It is a leader in 'ultra fashion,' showcasing numerous products following social networking service (SNS) trends, and has already shown explosive growth backed by overwhelming support from Generation Z in Western countries such as the United States.
Moreover, another Chinese platform that entered the domestic market earlier, AliExpress, an overseas direct purchase site under Alibaba, is also expanding its influence in South Korea by leveraging price competitiveness.
According to WiseApp, AliExpress's estimated monthly users in July reached 4.67 million, ranking fourth behind domestic platforms Coupang, 11st, and Gmarket. In terms of simple growth rate, it increased by 82.6% compared to the same period last year, showing faster growth than any native platform.
WiseApp forecasts that the growth of these Chinese apps will accelerate further. Chinese shopping platforms compete as 'overseas direct purchase' services delivering relatively inexpensive Chinese consumer goods compared to domestic products.
WiseApp pointed out, "The industry expects that as cross-country delivery speeds increase, the influence of Chinese shopping platforms will grow even more."
Accordingly, domestic companies are responding by strengthening their overseas direct purchase competitiveness. Although the domestic e-commerce market is stagnant, the overseas direct purchase market is rapidly growing.
According to Statistics Korea, the size of the domestic overseas direct purchase market increased by about 1.3 trillion KRW from 4.0677 trillion KRW in 2020 to 5.3239 trillion KRW last year. Especially, since that year, demand for direct purchases from China and Japan has increased, and the market size is expected to approach about 6 trillion KRW this year.
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