July 7 Press Conference on the Introduction of 'Trade Assurance'
Escrow-Based 'Transaction Protection' Service
"Will Help Korean SMEs Expand into Overseas Markets"
"Rising Popularity of Korean Products... Expanding Investment Including New Busan Office"
Alibaba.com, the business-to-business (B2B) trading platform of China's Alibaba Group, has officially launched its 'Trade Assurance (TA)' service in Korea to help 'Made in Korea' products expand into overseas markets.
Sean Yang, Head of Global Business Development at Alibaba.com, held a press conference on the morning of July 7 at The Great Hall on the 3rd floor of Chosun Palace in Gangnam-gu, Seoul. He emphasized, "For small and medium-sized enterprises with limited resources, transaction risk is a factor that makes them hesitate to expand globally," and added, "Through the TA service, we will provide practical protection so that many Korean SMEs can confidently conduct global business."
Alibaba.com held a press conference on the 7th at The Great Hall on the 3rd floor of Chosun Palace in Gangnam-gu, Seoul. From the left, Marco Yang, Head of Alibaba.com Korea, Sean Yang, Head of Global Business Development at Alibaba.com, Summer Gao, Head of Global Supply Chain at Alibaba.com, and Andrew Cheun, Head of Payments and Transactions at Alibaba.com. Provided by Alibaba.com
Trade Assurance is Alibaba.com's proprietary transaction protection service. The company explained that by establishing an escrow-based payment system, it can eliminate uncertainties that may arise during transactions with overseas buyers. Escrow is a transaction safety mechanism in which a third party holds the payment and releases it only after the transaction is completed. With the introduction of this service, Alibaba.com will hold the payment in escrow for transactions between Korean sellers and overseas buyers.
Summer Gao, Head of Global Supply Chain at Alibaba.com, said, "We have identified several challenges faced by Korean sellers when entering overseas markets: difficulties in gaining buyers' trust, reduced transaction efficiency due to complicated offline procedures, and challenges in proving fulfillment capabilities due to a lack of online data." She explained, "To enable global transactions to be conducted as safely as local transactions, Alibaba.com will play roles in building trust, supporting online payments, expanding business opportunities, managing risks, and arbitrating disputes."
Trade Assurance helps sellers identify buyers with poor reputations in advance, enabling risk management from the early stages of a transaction. In addition, as transaction history accumulates through Trade Assurance, a seller's search ranking and visibility within Alibaba.com increase. The company noted that some Korean companies have expanded their overseas orders after adopting Trade Assurance.
Chae Suyeon, CEO of Meplus Korea, an OEM·ODM company specializing in eyelash extension and semi-permanent makeup products, said, "In the past, many customers hesitated to make purchases due to security concerns with external offline payment methods. However, after introducing Trade Assurance, fast and secure payments became possible, and actual purchase conversions have noticeably increased."
The TA service is free to activate. However, upon successful transactions, a service fee of 4% of the total transaction amount is charged, with a maximum of $100 per transaction. New sellers are exempt from service fees for their first three transactions. Premium sellers receive a 50% discount on service fees. The promotion will end on March 31 next year. Regarding concerns that the service fee is higher than in other countries, Sean Yang explained, "It is difficult to compare with other countries based solely on the fee rate," citing differences such as country-specific cost settlements, exchange rates, and regulations.
Sean Yang, Head of Global Business Development at Alibaba.com, is speaking at a press conference on the 7th. Photo by Alibaba.com
Sean Yang emphasized, "Since the launch of the 'Korea Pavilion,' a dedicated page for Korean companies, in July last year, traffic has increased by about 50% year-on-year, the number of Korean products has grown by 40%, and the number of Korean sellers has increased by 80%, indicating rising popularity of Made in Korea products on Alibaba.com." In fact, within the Alibaba.com platform, K-beauty (beauty and personal care) grew by 45.4% year-on-year, K-food (food and beverages) by 56.1%, and K-fashion (apparel) by 74.1%.
Looking ahead, Alibaba.com announced plans to continue investing in raising overseas awareness of Korean products. Last year, Alibaba.com expanded its localization team at its Seoul office, and last month, it opened a new office in Busan with about 10 employees. Sean Yang stated, "We will continue to expand our local team to provide services for various sellers in Busan and nearby regions," but clarified, "However, there are no plans to establish a logistics center in the Busan area."
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