Temu is rising in another country, and local platforms are fighting back!

Amid rising prices and high commodity inflation in South Korea, Chinese cross-border e-commerce platforms such as Temu have quickly gained favor among South Korean consumers with their “ coupons, free delivery, and free returns ” strategy .

Unable to resist the temptation of high-quality and low-priced goods, coupled with the increasing pressure of life, a large number of Koreans have begun to switch from Coupang, Naver , Gmarket , etc. to Temu for shopping.

Data shows that as of the end of 2023, the number of active users of Temu and AliExpress, the two major Chinese e-commerce applications, in South Korea has exceeded 10 million, which means that one in every five Koreans has a shopping app of this type installed on their mobile phones.

It is understood that Temu already has 8.296 million users in South Korea, ranking third among the country's e-commerce shopping apps . The number of AliExpress users has reached 8.871 million, ranking second, second only to Coupang .

There are also data showing that Temu and AliExpress have seen a surge in sales of 130 % in just six months since entering the Korean market . Recently , market analysis company WiseApp, Retail, Good's also released a new statistic that from April 1 last year to the end of March this year, Temu and AliExpress have sold more than 3 trillion won worth of products in Korea.

In contrast, the performance of South Korea's local e-commerce is somewhat lagging behind . Data shows that the number of payments has dropped by 1.1% and the amount of payments has dropped by 2.5%. All these signs show that South Korea's local e-commerce platforms are facing tremendous pressure.

In response to this situation, local e-commerce platforms have introduced relevant policies to counter Chinese cross-border e-commerce platforms including Temu.

South Korean e-commerce giant Coupang recently announced that it will invest 3 trillion won to expand logistics infrastructure , strive to achieve the goal of 100% free delivery coverage , and retain more members by strengthening "wow credit card" benefits , extending the points discount period, and holding promotional activities .

Meanwhile, Gmarket will invest 100 billion won in its May promotion, twice the cost of previous years. It is expected that in this promotion, Gmarket users will be able to enjoy discount coupons worth up to 150,000 won, multiple brand discount coupons, and instant credit card discounts.

Another major e-commerce platform, Naver , announced that it will provide same-day delivery services in order to shorten the time it takes for consumers to receive goods . Auction also plans to reduce its annual membership fee from 30,000 won to 4,900 won in May to attract more consumers.

In addition, a survey report released by global consulting firm GlobalData shows that as the number of online shopping consumers continues to increase, the size of South Korea's e-commerce market is expected to exceed US$160 billion ( approximately equivalent to 220 trillion won) by 2027 .

Faced with such a promising market, many Chinese platforms are also waiting and watching. With more platforms entering the market in the future, competition in the Korean e-commerce market may become increasingly fierce, which will undoubtedly be a long-lasting and tough battle for local e-commerce companies.

Temu

South Korea