Korea Customs Service Reports China Overseas Direct Purchase Customs Data
Q1 C-Commerce Direct Purchase Amount Down 7%
Ali User Numbers Also Decline for 4 Consecutive Months
The popularity of C-commerce (Chinese e-commerce) companies such as AliExpress and Temu is waning. Amid a continued decline in the number of C-commerce app users, both the volume and value of overseas direct purchases (direct import) from China have decreased.
According to data submitted by the Korea Customs Service to Ahn Do-geol, a member of the Democratic Party of Korea, the number of customs clearance cases for overseas direct purchases from China in the first quarter of this year was approximately 28.92 million. This represents a 2% decrease compared to the previous quarter, the fourth quarter of last year (about 29.49 million). This is the first time that the number of overseas direct purchases from China, which had been increasing annually, has declined. During the same period, the value of overseas direct purchases from China also dropped nearly 7%, from $756 million (about 1.05 trillion KRW) to $705 million (about 980 billion KRW).
The C-commerce boom had driven a sharp increase in direct purchases from China every year. According to the Korea Customs Service, the number of customs clearances for Chinese overseas direct purchase goods was 55.42 million in 2022 and 88.82 million in 2023. This means that overseas direct purchases from China increased by more than 60% in one year. Looking at quarterly data, the number of Chinese overseas direct purchase cases rose from 16.02 million in the first quarter of last year to 29.49 million in the fourth quarter. In just three quarters, the number of Chinese direct purchase cases increased by 85%.
However, this year, transactions appear to have decreased due to ongoing controversies over the quality and harmfulness of products sold on C-commerce platforms. C-commerce companies have also been criticized for inadequate consumer protection measures.
As a result, the number of users of C-commerce apps is also on a downward trend. According to Mobile Index, a data analysis solution by IGAWorks, the monthly active users (MAU) of AliExpress and Temu last month were approximately 6.254 million and 6.608 million, respectively. Compared to May, AliExpress saw a 0.9% decrease, while Temu increased by about 2%.
However, both platforms showed a noticeable decline in users compared to their peak MAUs recorded in March and April. AliExpress's MAU last month was down 9.9% compared to March (6.94 million), and Temu also saw nearly a 5% decrease compared to April (6.93 million).
Overseas direct purchases from China mainly involve relatively inexpensive products. According to data received by Representative Ahn from the Korea Customs Service, 99.3% of the goods are under $150, which are exempt from customs duties. Under the current simplified customs clearance system for overseas direct purchases, goods purchased for personal use under $150 are exempt from customs duties.
The average purchase amount per transaction through Chinese direct purchases is also decreasing. In the first quarter of this year, the average purchase amount per transaction was $24.4 (about 34,000 KRW), down 13% from $28 (about 39,000 KRW) in the first quarter of last year. This is likely due to C-commerce platforms primarily selling low-priced products.
Ahn Do-geol, a member of the Democratic Party of Korea, stated, "Not only are harmful products such as children's items without guaranteed safety entering the market, but the commercial areas of domestic small business owners are also being encroached upon, so government-level measures are necessary." He emphasized, "We must carefully seek solutions that consider both consumer rights and public safety to prevent incidents like the overseas direct purchase ban from China, which was withdrawn after just three days, from happening again."
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