Alibaba's Ambitious Entry into Korea Unveiled
Korean SME Platform 'Pavilion' Launching Next Month
Supporting Exports Worth 34.3 Trillion Won Over 4 Years
Chinese e-commerce company Alibaba.com is launching a business-to-business (B2B) platform to facilitate overseas sales of domestic small and medium-sized enterprises (SMEs) products. The Korean Wave, which originated from K-pop, has extended to 'K-beauty' and 'K-food,' aiming to distribute Korean products worldwide. Since Korean products have already been recognized globally for their technology and brand awareness, integrating them with Alibaba Group's distribution network is expected to generate substantial intermediary commission revenue.
On the morning of the 22nd, Alibaba.com held a 'Press Conference to Support the Acceleration of Global Sales for Korean SMEs' at The Plaza Hotel in Jung-gu, Seoul, and announced that it will officially launch the dedicated B2B website for domestic companies, 'South Korea Pavilion,' on the 8th of next month.
This is the first time Alibaba.com has established a dedicated B2B platform for a specific country, with South Korea being the initial market. The platform aims to help over 5,000 domestic SMEs enter the global B2B market. Previously, in March, Alibaba.com introduced services to support domestic companies' exports, such as the 'AI Smart Assistant' and the 'Industry Leader Project.' Andrew Jung, Vice President of Alibaba.com, stated, "Various e-commerce platforms within Alibaba Group, including Alibaba.com, will leverage their unique business strengths to support the growth of Korean SMEs and brands."
According to Alibaba Group, over the past four years, a total of 7,600 Korean brands have entered the Chinese market through e-commerce platforms like Taobao and Tmall. These platforms have seen nearly 100 million Chinese consumers purchasing Korean products annually. In addition to China, exports are also made through the Southeast Asia-specialized e-commerce platform Lazada. From 2020 to last year, the scale of Korean products exported via platforms such as Taobao, Tmall, and Lazada reached 34.3 trillion KRW.
In the B2B business sector, over the past four years, more than 2,550 domestic SMEs have entered the global market through Alibaba.com, recording exports worth approximately 130 billion KRW. Alibaba.com explained that K-beauty products, in particular, have shown high interest in countries such as Brazil, Germany, and India.
In fact, Korean products are selling rapidly not only in China but also worldwide recently. Domestic SME cosmetic brands like Chosun Beauty are dominating the Amazon beauty category. Ramen and frozen gimbap, including Samyang Food’s Buldak Bokkeum Myun, have even caused sell-out crazes in the U.S. market.
Silicon Two, which distributes domestic indie cosmetic brands to overseas markets, recorded sales of 342.9 billion KRW last year and is expected to grow more than double (108%) this year, showing rapid growth. For this reason, Olive Young has also ventured into overseas direct purchasing of domestic cosmetic brands through its global mall.
Marco Yang, Head of Alibaba.com Korea, said, "Korean products are evaluated as attractive items by consumers worldwide and global B2B buyers, but it is a challenging task for SMEs with relatively limited resources to enter the global market. Alibaba.com will officially open a dedicated B2B website for Korean sellers and support Korean SMEs to enter the global market more easily."
Some functions of the Pavilion website provide a 'Korean-English simultaneous translation API' developed with the participation of PlayAuto from the domestic company ConnectWave Group. This aims to reduce the language burden for domestic SMEs. Lee Hyun-chul, Head of PlayAuto Business at ConnectWave, said, "We hope this collaboration with Alibaba.com will help expand sales channels for domestic sellers in the global B2B market and strengthen their competitiveness. We will do our best to provide stable service support."
Meanwhile, Alibaba Group is also implementing a commission exemption policy for domestic companies through the Chinese e-commerce (C-commerce) platform AliExpress. Sellers registered in 'K-Venue,' which has been operating since October last year, are benefiting from commission exemption policies and subsidies for both sellers and consumers.
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