Key Highlights:
Chinese Platforms Leading: JD.com, Alibaba, and Pinduoduo (Temu’s parent company) are among the top five global e-commerce companies, alongside Amazon and Coupang.
Rapid Revenue Growth: The top three Chinese e-commerce platforms saw an average annual revenue growth rate of 41.0% over the past five years.
Market Penetration in Korea: Chinese platforms have significantly increased their presence in the Korean market, with AliExpress entering in 2018 and Temu making rapid gains since its launch in July last year.
Korean Market Dynamics: The Korean e-commerce market reached a record 228.9 trillion won in 2023, becoming the fifth largest globally.
Global E-commerce Rankings by Revenue:
- Amazon (USA)
- JD.com (China)
- Alibaba (China)
- Pinduoduo (China)
- Coupang (South Korea)
Chinese Platforms’ Influence:
Market Share Growth: Chinese e-commerce companies have seen a rapid increase in market share, especially in Korea.
AliExpress and Temu: AliExpress secured a significant position soon after entering Korea, while Temu quickly climbed the ranks, pushing established players like Gmarket down the list.
Korean User Rankings (As of May 2023):
- Coupang
- AliExpress
- 11st
- Temu
- Gmarket
Challenges and Opportunities:
Regulatory Needs: The rapid growth of Chinese platforms highlights the need for improved regulatory policies in Korea to protect domestic businesses and consumers.
Domestic vs. Imported Goods: Korean businesses face challenges from the competitive pricing of imported goods, particularly from China, which holds a larger market share than domestic products.
Economic Impact: Purchases from Chinese platforms surged by 121.2% year-on-year to 3.3 trillion won, compared to 1.9 trillion won spent on American platforms, leading to a 5.1 trillion won deficit in Korea’s overseas e-commerce balance.
Strategic Recommendations:
Regulation Improvement: Enhancing distribution policies and strengthening consumer protection can help balance the competitive landscape.
Support for Local Businesses: Providing more support for small and medium-sized distribution and manufacturing companies can help them compete effectively.
Monitoring Market Trends: Continuous analysis of market trends and consumer behavior will be crucial for adapting to the evolving e-commerce landscape.
Conclusion
The dominance of Chinese e-commerce platforms in the global market, coupled with Coupang’s strong performance, underscores the dynamic nature of the industry. As the landscape continues to shift, strategic regulatory measures and support for local businesses will be essential to foster a balanced and sustainable e-commerce ecosystem.
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