E-Commerce Clash Escalates in S. Korea Between Coupang and AliExpress

Within hours of Coupang's announcement of a 3 trillion won investment plan to expand the "Rocket Delivery" service nationwide by 2027, AliExpress responded. The Alibaba Group-owned AliExpress extended its commission-free policy for Korean sellers on the K-Venue platform until June 2024.

AliExpress had previously disclosed its $1.1 billion investment plan in South Korea over three years to boost its business operations in the country.

The Battle Unfolds

Korea Bizwire reported that the escalating competition between Coupang and AliExpress is regarded as a "silent war" in the industry, as both giants strive for dominance in the lucrative South Korean e-commerce market.

Industry experts see the confrontation as an expected outcome due to Coupang's strong market position and the competitive threat posed by the entry of AliExpress and other Chinese e-commerce players, collectively known as "C-commerce."

Coupang's Determination

Korea Times reported that despite losses of 6 trillion won, Coupang's 3 trillion won investment plan showcases its resolve to combat the C-commerce competition through its nationwide logistics network and Rocket Delivery service.

Impact on Smaller Retailers

As Coupang and AliExpress engage in aggressive spending, smaller domestic retailers voice concerns about heightened price wars, promotions, and the challenge of matching the giants' infrastructure investments during the economic downturn.

With Alibaba Group's substantial cash assets of $85.5 billion, the industry foresees AliExpress potentially increasing investments in South Korea, adding pressure on Coupang and local retailers striving to stay competitive.

AliExpress's Strategic Moves

Ray Zhang, the head of AliExpress Korea, aims to strengthen the seller base by waiving commissions for Korean vendors. This would enable a broader consumer reach and foster a mutually beneficial business environment, especially for small and medium-sized partners.

AliExpress has initiated a significant shopping subsidy event on its K-Venue platform. Through a separate promotion, it provided shopping credits worth 100 billion won and exclusive coupons worth 100 million won, attracting many participants within hours.

Photo: Coupang Newsroom