After tackling North America and other regions, Chinese e-commerce firms are edging in on the South Korean market.
Chinese giants Temu and Aliexpress have seen a sales increase of over 130% in the South Korean market within the past six months. According to BC Card, a South Korean credit card provider, payment data from October 2023 to March 2024 — total payments on Chinese e-commerce platforms have increased by 138%, while the number of transactions has risen by 130.6%.
In contrast, local South Korean e-commerce brands saw a decrease of 2.5% in total payments and a 1.1% decline in the number of transactions during the same period.
The entrance of Chinese e-commerce giants, signals fierce rivalry amid an already highly-competitive environment where firms including Coupang, Naver and Tmon have traditionally dominated the market.
Pinduoduo Holdings-owned Temu, which established its Korean office in February 2024, is currently being investigated under claims of “false and misleading” advertisements according to South Korean authorities.
South Korea’s Fair Trade Commission launched an investigation, following concerns over Temu's marketing tactics, which has included strategies like cash coupon distribution; as well as allegations of delayed deliveries and low product quality. There are speculations that the commission may broaden its probe to include other Chinese e-commerce platforms after similar investigations into Alibaba-owned AliExpress.