As Korean Regulators Narrow Investigation Net... Ali and Temu Take Voluntary Improvement Steps

Ultra-Low Price Bait Thrives Amid Carcinogen Controversy
Fair Trade Commission Signs 'Voluntary Product Safety Agreement'
Strengthening Consumer Protection... Willingness to Cooperate with Authorities

Facing criticism over product risks, Chinese shopping platforms have bowed their heads as regulatory investigations have intensified. They plan to strengthen product safety monitoring and improve inadequate consumer protection measures.

On the 13th, AliExpress and Temu issued a press release stating, "We will make greater efforts for consumer safety," pledging to enhance product safety and cooperate with Korean regulatory authorities.

Ray Zhang, CEO of AliExpress Korea, said, "To effectively strengthen consumer protection, we will closely cooperate with regulatory authorities going forward and dedicate ourselves to meeting Korean standards." Sun Qin, co-founder of Temu and CEO of Temu Korea under Whale Co Korea, also said, "Temu follows core values that prioritize consumers. We are ready to respond promptly and sincerely to regulatory requests to ensure consumer safety and the platform's sustainable growth."

That afternoon, AliExpress and Temu signed a 'Voluntary Product Safety Agreement' with the Korea Fair Trade Commission, focusing on strengthening monitoring of hazardous products and rapid blocking measures. Ray Zhang, CEO of AliExpress Korea, and Sun Qin, co-founder of Temu and CEO of Temu Korea, personally attended the signing ceremony. This is the first time Temu, which has expanded into 65 countries, has signed such an agreement with a government for consumer protection.

The Fair Trade Commission has expanded its surveillance as consumer complaints surged with AliExpress and Temu targeting the Korean market, investigating issues such as personal information protection, consumer dispute responses, and origin labeling of agricultural products. Recently, it launched an ex officio investigation into unfair terms and conditions against AliExpress and Temu and is also investigating allegations of false and exaggerated advertising and violations of consumer protection obligations by these companies.

The number of domestic app users of C-commerce (Chinese e-commerce) platforms like AliExpress and Temu, which had pursued ultra-low-price strategies, turned to a decline for the first time in April. According to app and retail analysis services WiseApp, Retail, and Goods, AliExpress's monthly active users (MAU) last month recorded approximately 8.589 million, down about 3.16% from about 8.871 million in March. Temu's MAU also slightly decreased to about 8.238 million last month from about 8.296 million in March, showing stagnation. This is the first decline in app users since these two platforms entered the domestic market.

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

Specifically, among the 38 products with detected harmful substances, cadmium exceeding the standard was found in 6 items. Phthalate-based plasticizers above the standard were detected in 27 items, and lead exceeding the standard was found in 5 items. Notably, jewelry such as rings and bracelets for infants sold on AliExpress contained cadmium exceeding the standard by up to 3,026 times.

Inadequate 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 of 800 consumers who had used AliExpress, Temu, or SHEIN within the past year, 80.9% reported dissatisfaction or experienced damage while using C-commerce. Among the issues cited, delivery delays (59.5%) were the most common, followed by low quality (49.6%), defective products (36.6%), exaggerated advertising (33.5%), and delayed after-sales service (28.8%).