[Reporter’s Notebook] The Negative Tag AliExpress Has Yet to Shed

This year, the companies that became hot topics in the distribution industry were undoubtedly the three C-commerce (Chinese e-commerce) companies: AliExpress (Ali), Temu, and Shein, with Ali standing out the most. Ali, which has primarily provided overseas direct purchase (direct import) services from China, gained attention as it began to actively expand its business in Korea this year. As the number of customers using Ali surged, domestic e-commerce companies, feeling a sense of crisis, strengthened discount promotions and announced plans to increase investments.

Meanwhile, various controversies surrounding Ali followed like a “tag.” Notable issues included reports of counterfeit products among the items sold and the detection of harmful substances such as carcinogens in some products. Service problems such as poor customer consultation and refunds during the early stages of the business also came under scrutiny. As such cases repeated, many consumers criticized Ali, expressing distrust.

Earlier this month, Ali invited domestic reporters to Alibaba Group’s headquarters in Hangzhou, China. Considering that Chinese companies rarely open their local business sites to foreign media, this was an unusual move. Ali explained to the press that they would introduce the Hangzhou headquarters building and logistics center while revealing their business vision through presentations by the management team.

However, when the lid was lifted, there was nothing particularly new. The announcement about Ali’s domestic business reiterated the existing message of “offering a wide variety of products at low prices to benefit consumers.” They also repeated their stance that there were no concrete plans yet regarding the previously reported construction of a logistics center in Korea or mergers and acquisitions (M&A) plans involving distribution companies. However, seemingly aware of recent controversies, the management devoted most of the presentation time to explaining intellectual property protection measures and harmful product blocking systems.

The logistics center that was supposed to be revealed to the press also seemed far from the “cutting-edge” image they emphasized. The logistics center near Hangzhou visited by the press was a conventional facility where only the initial sorting after goods arrival was automated, while most processes from movement to packaging still required manual labor. It felt as if domestic courier companies or logistics facilities of fulfillment service providers like Coupang and SSG.com were much more advanced. Ali operates a robot-based state-of-the-art logistics center in Wuxi, Jiangsu Province, China, but this facility was not shown to the press this time.

Ali described the press invitation event as “an opportunity to visit Hangzhou and learn about AliExpress’s vision and business.” Perhaps from their perspective, they wanted to make up for the negative reactions toward Ali. However, the press tour of the headquarters and logistics center and the press conference did not seem sufficient to remove the negative tags.

Ali’s efforts to simplify the distribution network to sell products at reasonable prices and not charge commissions to domestic sellers listed on the domestic product sales channel ‘K-Venue,’ as well as Alibaba Group’s plan to help domestic sellers expand overseas through its e-commerce platform, are commendable. Continuing such initiatives for domestic consumers and sellers while striving for transparent information disclosure and communication will be essential to finally shed the negative tags that have followed so far.