This Time 'Seller War'... Ali Airstrike, Radical Support for Native e-Commerce Sellers 'Counterattack'

AliExpress Increases Capital by 33.4 Billion KRW for Korean Corporation
Recruiting Domestic Sellers with Chinese E-commerce Financial Power
Domestic Companies Expand Support for Marketing and Storage

Chinese direct purchase apps (C-commerce), including AliExpress (Ali), are strengthening their offensive in the domestic market, prompting native e-commerce companies to respond. As Ali attracts domestic sellers by promoting 'zero commission,' fierce 'seller recruitment competition' is taking place between Korean and Chinese e-commerce companies.

Gmarket announced on the 24th that it will conduct a marketing support promotion for new sellers this year. Any seller who registers 10 or more products by the 19th of next month can apply, and advertising costs of 1.8 million KRW per seller will be supported for the first 1,000 applicants. In addition, support for overall marketing, such as free advertising agency services and free exposure in Super Deals, will be provided.

Domestic e-commerce companies continue seller support measures

Earlier, Gmarket announced seller support measures, including providing the high-efficiency personalized advertising product ‘AI Sales Boost Advertising’ free of charge for seven days to sellers participating in 'Big Smile Day' from the 7th to the 20th of next month, and on this day, it announced additional plans.

SSG.com, a subsidiary of Shinsegae Group, is pursuing business strategies this year to strengthen delivery competitiveness and advance seller growth programs. It plans to open a state-of-the-art logistics center in Gwangju, Gyeonggi Province, in the fourth quarter of this year and process more than 200,000 additional orders per day. Also, to support seller growth, the monthly sales target achievement bonus calculation range has been subdivided from the previous single 1 million KRW range to 1 million KRW, 3 million KRW, and 5 million KRW ranges.

11st recently launched its own fulfillment service, ‘Shooting Seller,’ to reduce sellers' logistics costs. The core is that when sellers stock products at the 11st logistics center, a series of services such as storage, packaging, delivery, inventory management, and exchanges/returns are provided. Sellers can gain faster delivery competitiveness than before and simultaneously reduce logistics burdens, allowing them to focus on their core business such as product development and production.

Lotte On, the e-commerce platform of Lotte Shopping, uniformly lowered the sales commission for some categories of digital devices such as cameras, game consoles, and mobile phones from the existing 9% to 5%. This applies not only to new sellers but also to existing sellers. Through this, the goal is to increase the number of digital appliance sellers by 30% compared to the current number within this year.

The reason native e-commerce companies are launching large-scale seller support is interpreted as a measure to prevent existing sellers from leaving as the influence of C-commerce, including Ali, grows.

Ali injects 33.4 billion KRW into its Korean subsidiary... K-product delivery competitiveness increases

In particular, AliExpress Korea, Ali's Korean subsidiary, carried out a capital increase of 33.4 billion KRW on the 17th to strengthen its Korean market strategy. This is just two months after the capital increase in February. The existing capital of the Korean subsidiary was 4 billion KRW. The industry views this capital increase as a signal for building an integrated domestic logistics center. Ali previously announced in its investment plan submitted to the government that it would invest about 260 billion KRW to build a logistics center with an area of 180,000㎡ (about 54,450 pyeong). An Ali representative explained, "We conducted a capital increase of 33.4 billion KRW for Ali Korea, the Korean subsidiary," but added, "It is a normal business procedure."

If Ali builds a logistics center domestically, it can significantly shorten the delivery period of ultra-low-priced Chinese products. In addition, products sold by domestic sellers are expected to be delivered faster than using existing courier services.

Last month, Ali began recruiting domestic sellers with the unprecedented condition of 'zero commission.' According to 'Breach,' an e-commerce solution company that acts as an agent for Ali entry, more than 10,000 sellers inquired about the entry agency service within two weeks after the zero commission declaration. Open markets' commissions directly affect sales. However, Ali is foregoing this to absorb domestic sellers. Korea is the only country where Ali does not charge commissions in the global market.

Along with this, Alibaba, the parent company of Ali, is running a program to help Korean sellers expand globally. Alibaba, the parent company of AliExpress, has proposed supporting 100 million USD (about 134 billion KRW) for Korean sellers. It plans to establish a sourcing center to discover excellent products from domestic sellers and open a global sales channel for Korean sellers in June. The plan is to support exports of 50,000 domestic small and medium-sized enterprises over three years.

An industry insider said, "If domestic sellers enter and start selling Korean products, it can overcome the chronic quality issues of Chinese e-commerce," adding, "It also aims to lower the barriers for overseas consumers through high-quality Korean products." Another insider said, "Securing quality sellers is as important as consumers in open markets," and "Since securing many products with good prices and quality is competitiveness, the unprecedented recruitment battle is expected to continue for the time being."