Coupang, Kurly on alert over AliExpress expansion
Coupang and Kurly — Korea’s two major fresh food delivery platform operators — are increasingly anxious over AliExpress’s expansion into the Korean market, as the Chinese e-commerce firm does not charge any sales commission in order to absorb as many sellers as possible from its rivals, according to industry officials, Tuesday.
The enormous funding power of Alibaba Group also comes as a risk factor for the two domestic e-commerce giants, which currently dominate the nation’s food delivery market.
But given AliExpress’s rapid inroads here, local firms are becoming more vigilant over the emerging threat posed by the Chinese firm. According to data from app market tracker WiseApp, the number of local users for AliExpress reached 7.17 million as of the end of January, a surge of more than 113 percent from the previous year.
Many industry officials said AliExpress’s expansion into the fresh food delivery market will be a threat to its local rivals, as the company is adopting the “no commission” strategy for its sellers.
“Most typical retailers charge a certain amount of commissions to its sellers, but AliExpress is moving to attract as many sellers as possible to its platform with the strategy,” an official from a local e-commerce firm said. “But it still remains to be seen how seriously the tactic will generate outcomes.”
“We have yet to build a strong logistics system to compete directly with Coupang and Kurly. ”
AliExpress started selling fresh foods — such as strawberries — on its platform on Monday. The number of its sales items is limited for the time being, but the company is expected to increase them at an alarming pace, according to the official.
“But the launch of AliExpress’s fresh food delivery business here will not pose any immediate threat to Coupang or Kurly, as the Chinese firm does not operate any logistics centers here,” the official said.
AliExpress dispelled the concerns, saying it leaves open the possibility of making a relevant investment after watching the pace of its growth.
“We have yet to build a strong logistics system to compete directly with Coupang and Kurly because they are capable of delivering fresh groceries at a super-rapid pace with their logistics facilities nationwide,” a spokesperson for the company said. “But we leave the door open for investment in logistics facilities here after watching closely the initial response for our business.”
For instance, Kurly delivers fresh food by dawn for any orders placed before 11 p.m. the night before. Coupang also operates its own Rocket Fresh service, so customers can receive their orders for most groceries in the morning for orders made before midnight the day before.
But this is not the case for AliExpress, whose sellers take two or three days to deliver groceries due to its lack of local logistics facilities.