Shinsegae, SK, Coupang unnerved as sellers flock to AliExpress
Home-grown retail platforms — operated by Shinsegae, SK and Coupang — are on high alert over AliExpress, as more sellers move to the Chinese e-commerce firm due to its enticing incentive packages, according to data and company officials, Friday.
AliExpress’s strategy is ringing alarm bells for Korean firms, as the company aims to not only attract shoppers but also absorb sellers, fueled by its massive investment plans in the region.
Data from Brich, a Seoul-based shopping solution provider that assists Korean small business owners and sellers initiate their sales activities on AliExpress, indicates that over 10,000 sellers here inquired about an agent service before joining the Chinese sales platform between March 4 and 20.
Sellers are increasingly drawn to
the Chinese platform in tandem with its rapid expansion in the Korean market. According to data from market tracker Mobile Index, the AliExpress app saw a surge in daily active users to 1.65 million on March 18, coinciding with the launch of the company’s special promotional campaign. Throughout the first 18 days of March, the average number of daily active users remained at a respectable level of 1.33 million.
Additional data from Wiseapp Retail Goods reveals that AliExpress’s monthly active users (MAU) reached 8.18 million in February, marking a remarkable 130 percent increase from a year ago. This surge propelled the Chinese platform to become the second-largest shopping app, surpassing 11th Street and Gmarket, whose MAU stood at 7.36 million and 5.53 million, respectively, during the same period. However, Coupang remains the undisputed leader with 30.1 million in MAU.
11th Street, operated by SK Square, and Gmarket, an e-commerce affiliate of the Shinsegae Group, find themselves in a quandary over the diminishing competitiveness of their e-commerce subsidiaries amidst the growing prominence of AliExpress.
“AliExpress lures sellers with free commissions, and on top of that, they can also expect future overseas sales when AliExpress launches the business helping small sellers here to export their items abroad,” an official from a retail firm said.
AliExpress has not confirmed the exact timelines for the launch of the service, but it is anticipated to commence sometime around the latter half of this year.
Another industry source also raised the possibility of local firms losing further ground.
“The initial market response for AliExpress remains solid due to its unrivaled price competitiveness,” the source said. “The core strength of AliExpress is that it satisfies not just customers, but sellers on an equal footing. Local retail firms will end up losing their customers and sellers to the Chinese platform unless they come up with countermeasures.”