[Altesh Shock] Ali's 'Zero Commission' Policy Revives Entrepreneurs

②Festival for Sellers... 'Opportunity' for Entrepreneurs
Ali Invites Korean and Chinese Sellers
'Fear of Losing Out'
Heated Competition to Support Sellers

As the domestic e-commerce industry grows increasingly concerned about the ultra-low price invasion from Chinese direct purchase platforms like AliExpress (Ali) and Temu, major domestic open market operators such as Gmarket, Auction, and 11st are consecutively strengthening support for sellers. The heated competition also has a positive effect in that it provides broader 'win-win' opportunities for domestic sellers and entrepreneurs.

According to the distribution industry on the 27th, Ali will implement a subsidy policy of 10 billion yuan (approximately 2 trillion KRW) next month to promote sales for sellers. This is interpreted as a measure to regain competitiveness by increasing benefits for sellers, who are the core of the open market business, while preventing existing sellers from leaving.

Since October last year, Ali has launched the Korean brand section called 'K-Venue' and focused on securing domestic sellers (K-sellers) by offering free entry and sales commission policies. Major Korean food and daily necessities companies such as CJ CheilJedang, LG Household & Health Care, Lotte Chilsung Beverage, Dong-A Otsuka, and Yuhan-Kimberly have joined. Along with Haitai Confectionery, which recently decided to join under the free entry and sales commission policy, many large food companies including Orion and Lotte Wellfood are reportedly considering joining. Ali has extended the originally scheduled free commission policy from March this year to June.

Besides large corporations, Ali is also actively fostering small and medium-sized and individual sellers who are listed on domestic open markets. Within the food industry, there is a growing sentiment to expedite the schedule as it is expected that the earlier the entry, the greater the benefits.

Small sales companies and entrepreneurs cannot help but welcome Ali's free commission benefits. A representative from a company supplying frozen foods to Ali hinted, "Compared to other platforms like Coupang, Ali's free entry commission policy is such a groundbreaking benefit in the industry that sellers have no reason not to join, so companies wanting to enter are lining up."

From the seller's perspective, commission exemption is the biggest benefit. Typically, sellers have to pay about 10-20% of their sales as commission to sell products on e-commerce platforms. However, if the commission is waived, the cost burden disappears, allowing for higher expected profits.

As Ali aggressively markets by offering the unprecedented condition of free commissions to platform sellers (listed companies) to induce entry, K-commerce companies such as SSG, Lotte ON, WEMAKEPRICE, and Coupang have also simultaneously strengthened seller support. Platforms that secure skilled sellers attract users, which directly translates into sales, making the acquisition of competent sellers a key competitive factor for platforms.

An entrepreneur selling beauty accessory products on various platforms including Coupang and Ali said, "Before Ali existed, the commission burden kept increasing, which was always a concern," adding, "Other companies, stimulated by Ali's free commission policy, competitively provide benefits to sellers, allowing small entrepreneurs like us to breathe easier."

Alibaba, the parent company of AliExpress, recently submitted a business plan to the Korean government that includes a support fund of 100 million USD (about 134 billion KRW) for Korean sellers. They plan to establish a sourcing center to discover excellent products from domestic sellers and open a global sales channel for Korean sellers in June. Over three years, they aim to support exports from 50,000 domestic small and medium enterprises. An industry insider said, "Some concerns arose that due to the so-called ultra-low price invasion by C-commerce platforms like Ali and Temu, domestic small business sellers and vendors might suffer damage, becoming more dependent on these companies or facing issues like monopolization," adding, "C-commerce platforms seem to be aware of these controversies and are making efforts by preparing support plans for domestic sellers and making unprecedented investments to expand their business in Korea."

Series Order

①Ultra-low price strategy that swallowed Korea... Fathers face job loss crisis
②Ali's 'Zero Commission' policy saves entrepreneurs
③"Embrace China" Ali attracts talent... What about job creation effects?
④Even if Chinese-made, if cheap, consumers buy... Consumption trends changed
⑤Busy preparing countermeasures only after losing home ground to China