Pusan National University (PNU) student Kim Ji-Min (School of Global Studies, 22) firstly looks for “AliExpress” (Ali) when buying clothes. This is because products on these Chinese platforms are relatively cheaper compared to domestic fashion platforms most preferred by young women. Kim said, “I always search on “Ali” to see if they sell the same clothes when I find clothes I like on domestic platforms such as “Ably.” It’s because I heard that in most cases, sellers on domestic platforms import clothes from China at wholesale prices and then resell them with a markup.”

The rise of Chinese e-commerce companies like “Ali,” “Temu,” and “Shein” in the domestic market is remarkable. According to “Wiseapp,” an analytics company on consumer data in applications, in February, there were 8.18 million domestic users on Ali, increasing by 4.6 million in a year, securing second place in the domestic comprehensive mall application ranking, following Coupang. Temu also saw an increase in users by 5.81 million compared to the same month last year, ranking fourth. 

Currently, people of all ages in Korea are actively using Chinese e-commerce platforms. According to the “Survey on the Usage of AliExpress by Age” released in February by “Mobile Index,” an application analytics service, the age groups of the 30s and 40s took the first place, each accounting for 26.8%. The age group of 20s followed them by 21.8%. Also, age groups of 10s and 50s accounted for more than 10%, indicating active usage across all age groups.

■Low Prices Attract Consumers

The reason consumers buy products from Chinese e-commerce platforms is undoubtedly the “low prices.” When “Channel PNU” accessed both “Ali” and “Coupang” and searched for the same product in terms of shape and design, one at Coupang cost 8,620 won while another at Ali cost 2,000 won, which is 6,620 won cheaper than at Coupang. For other identical products, most of them cost one-fifth on Ali compared to prices on Coupang.

These remarkably cheap prices appeal to university students that are financially constrained. Even if the purchased items don’t meet expectations, there is a perception of “getting what you pay for.” As a consumer who uses both domestic and Chinese e-commerce, Kim Ye-Eun (Dept. of Life Science and Environmental Biochemistry, 23) said, “The biggest advantage of Chinese e-commerce platforms is the low prices. The quality may not be high. But even considering that, I can save more than half compared to purchasing on domestic platforms.”

The Chinese e-commerce platforms have such competitive pricing due to the “C2M (Customer to Manufacturer)” distribution model. C2M is widely used in China, reducing retail margin by directly conveying customer demands to manufacturers without intermediaries such as wholesalers and distributors.

In domestic platforms, the complicated procedure for operating makes the price higher. Compared to overseas e-commerce platforms, the process requires more time and cost. Lee Yang-Ki (Prof. of International Trade, PNU) said, “According to laws in Korea, domestic operators have to go through steps such as getting KC certification, paying tariffs, and sales tax even when they sell low-cost products made in China. On the other hand, overseas operators like Ali and Temu are not subject to Korean laws, so they do not need to go through those processes, enabling them to suggest ultra-low prices.”

■Questions about the Quality

As much as the low prices offered by Chinese e-commerce platforms attract consumers, there are also persistent concerns about the quality of the products. This is because there are many “copy products” of domestic and international brands. Kim Ji-Min who bought cosmetics at Ali said, “I bought a lip product, but the quality was very poor, and I found that it was a copy of a Korean brand. There are many cases of cosmetics imitating Korean products, so I have stopped buying them from Ali since then.”

It is the same in the case of electronic devices. Choi Sun-Woo (Dept. of Sociology, 22), who purchased a nail lamp from Temu said, “For electronic devices or products requiring complex processes, I hesitate to buy them due to doubts about their quality. When I bought products in those categories, they usually didn’t meet expectations.”

Not only are there concerns about imitation products, but also issues regarding the sale of products that threaten consumer safety. Items that are banned domestically or made of unclear ingredients posing risks are distributed through these Chinese e-commerce platforms. Products such as adhesives and candles can be easily found even though they failed safety inspections by the Ministry of Environment and are prohibited from sale. For instance, in January, a British consumer suffered third-degree burns due to an adhesive for artificial nails purchased on Temu.

Products that are harmful to teenagers are also exposed without age verification. When “Channel PNU” accessed a Chinese e-commerce site, there were suggestive advertisements and products without any filtering. All users “Channel PNU” interviewed have encountered them. PNU student A said, “I often see products for adults on the site. Some have a label indicating they are for ages 19 and above, but the majority of them are openly displayed without any restrictions.”

■Government Steps in to Protect Consumers

Despite the concerns, Chinese e-commerce platforms continue to expand their presence in the domestic market. They have seized an unbeatable advantage for pricing and are investing in the domestic market with huge funds. According to “Busan Ilbo” on March 14th, “Alibaba Group,” the parent company of AliExpress, has announced their plan to invest 1.4 trillion won for three years in Korea to expand their business. The steady moves like this have put domestic companies such as Coupang, 11 Street, and Gmarket on high alert, prompting them to hold strategy meetings in February.

The government is also taking measures to prevent damage to domestic consumers caused by those Chinese platforms. On March 13th, the Fair Trade Commission (FTC) held an “Emergency Economic Ministerial Meeting” chaired by the Minister of Strategy and Finance and announced “Consumer Protection Measures for Overseas Online Platforms.” The plan involves amending the Electronic Commerce Act to require overseas operators to fulfill consumer protection obligations even if they do not have an office in Korea. Measures to detect imitation products and block harmful goods were also discussed to prevent damages.

On that day, the FTC also announced that it would take measures to protect personal information. It will verify policies regarding personal data processing, overseas data transfer, and safety measures by Chinese e-commerce platforms and take action if violations are found. In a press release, the FTC stated, “To prevent consumer damage regarding overseas online platforms and make overseas operators fulfill their consumer protection obligations under domestic law, all ministries will make overall inspections and take measures regarding them.”

Reporter Yoon Seo-Young

Translated by Lee Soo-Hyun