"Bought Cheap but Full of Carcinogens"... Ali and Temu See First Decline in User Numbers

User Numbers Decline in April
Controversy Over Low Quality and Consumer Protection Policies Amid Harmful Substance Detection
Coupang Continues User Growth Trend

The number of domestic users of applications (apps) from C-commerce (Chinese e-commerce) platforms such as AliExpress and Temu has turned to a decline for the first time. Although they attracted consumers with ultra-low prices as bait, their popularity seems to have waned due to quality issues of products sold on these platforms and reports of harmful substances being detected.

According to WiseApp, Retail, and Goods, app and retail analysis services, Ali's monthly active users (MAU) last month recorded approximately 8.589 million. This is about a 3.16% decrease compared to March (approximately 8.871 million). Temu's MAU also slightly declined to about 8.238 million last month from around 8.296 million in March, showing stagnation.

The decrease in app users for the two platforms is the first since their entry into the domestic market. After entering the Korean market, Ali and Temu rapidly increased their user base by selling ultra-low-priced products along with large-scale discount events, new membership promotions, and cash coupon giveaways. In particular, Temu's MAU was around 1 million immediately after its domestic launch in July last year but surged past 8 million by March.

The downward trend in C-commerce app users is interpreted as being influenced by product quality and safety issues on these platforms. According to the Korea Customs Service, an analysis of the components of 252 ultra-low-priced children's products sold on Ali and Temu recently found harmful substances exceeding domestic safety standards in 38 products, accounting for 15%. The harmful substances detected included cadmium, lead, and phthalate plasticizers.

Specifically, among the 38 products with detected harmful substances, cadmium exceeding the standard was found in 6 items. Phthalate plasticizers above the standard were detected in 27 items, and lead exceeding the standard was found in 5 items. Notably, cadmium was detected at levels up to 3,026 times the standard in infant rings, bracelets, and other accessories sold on Ali. Cadmium is a pollutant that causes the disease "Itai-itai disease," which can lead to respiratory difficulties and liver dysfunction. Phthalate plasticizers, which can cause reproductive dysfunction and endocrine disorders, and lead, which can cause anemia and central nervous system abnormalities, were also detected at levels exceeding the standards.

Status of hazardous substances detected in children's products sold on AliExpress and Temu. [Source=Korea Customs Service]

Insufficient consumer protection measures, slow delivery, and low product quality on C-commerce platforms are also reasons consumers are turning away. The perception of "you get what you pay for" has taken root among consumers. According to a survey conducted by the Korea Chamber of Commerce and Industry on 800 consumers who had used AliExpress, Temu, or SHEIN within the past year regarding "Usage status and perception of Chinese online shopping platforms," 80.9% of users reported dissatisfaction or experienced damage while using C-commerce. The most frequently cited problem was delivery delays (59.5%), followed by low quality (49.6%), defective products (36.6%), exaggerated advertising (33.5%), and delayed after-sales service (28.8%).

On the other hand, Coupang's MAU in April was about 30.908 million, slightly up from 30.866 million the previous month. Last month, Coupang announced it would raise the membership fee for its paid Wow Membership from 4,990 KRW to 7,890 KRW, a 58.12% increase. Although concerns were raised about a possible mass exodus of Wow Membership members, the slight increase in users last month suggests it has successfully defended against membership loss for now. This is attributed to the fact that no other domestic or international e-commerce company can match Coupang's (Rocket Delivery) fast delivery level. Naver (Delivery Guarantee), SSG.com (SSG Delivery), Gmarket and Auction (Smile Delivery), and 11st (Shooting Delivery) are also countering C-commerce's offensive by offering fast delivery services along with large-scale discount events.