Surpassing Coupang again! AliExpress staged an "ant tripping over an elephant" in South Korea

Surpassing Coupang again! AliExpress staged an "ant tripping over an elephant" in South Korea

Source: Ebrun Power

Author: Ren Qianwen

 

South Korea, ranked as the fifth largest e-commerce market in the world, is experiencing an AliExpress whirlwind.


According to data from Forbes Korea, AliExpress users spend more time on AliExpress than Coupang, a local Korean e-commerce giant. Among the 2.5 million cross-users of Coupang, the average usage time of AliExpress is 2.69 hours, while that of Coupang is 2.3 hours, which is much lower than the former.


Not long ago, another piece of news also directly pointed to this trend. Due to the surge in orders, AliExpress directly paralyzed the Korean Customs warehouse for a month - this is also the longest warehouse outage in recent years.


Figure: Forbes Korea reports that the "AliExpress whirlwind" from China is sweeping South Korea


It is impossible for a local giant to be surpassed by an overseas e-commerce platform in the eyes of the Korean media. "Foreign ants tripping up elephants" has also become the focus of recent discussions in the Korean media.


South Korea is a country that is extremely protective of its "local companies". Coupang is very strong in South Korea and has been the leader in South Korea's e-commerce since 2010. In addition to Coupang, Gmart, 11 Street, Auction, eBay and other e-commerce platforms also dominate in South Korea. In a market environment with many players competing against each other, AliExpress can be said to have "snatched food from the tiger's mouth" by defeating Coupang.


01How foreign ants trip up elephants . Korean young people are experiencing a change in consumption habits.

Young people are powerless to resist the social reality of "depressed job prospects, unable to buy houses, unable to pay rent, and unable to have children". So they turn to more cost-effective consumption to find the meaning of work, which gives Chinese sellers with great supply chain advantages a huge market opportunity.


Photo: AliExpress spokesperson and Chinese product advertisements during rush hour on the Korean subway


According to recent Korean application survey data, the installation frequency of energy-saving apps such as group buying, low-priced coffee, and financial management has increased significantly. To be precise, this generation of young Koreans is also more addicted to Chinese apps.


According to Marketer data, the size of South Korea's e-commerce market reached US$142.92 billion last year, making it the fifth largest e-commerce market in the world, comparable to the entire Southeast Asia.


In March this year , AliExpress launched a new spokesperson in South Korea, the famous Korean actor Ma Dong-seok, whose hit rate on YouTube reached 580,000. At the same time, it also launched Choice, which represents high-quality service and promises 3-5-day delivery, which attracted the attention of a large number of Korean users.


In the key strategies released by AliExpress this year , South Korea continues to be listed as one of the key national markets. It plans to use differentiated strategies, local-like experiences, and key strategies of the country to increase investment in goods to upgrade user minds in South Korea.

AliExpress has been making its mark since last year’s Double 11. It first took the top spot in the shopping app download list, breaking the three-year record of the Korean local app “Carrot Community”, and this year it surpassed the local giant Coupang in terms of user time. The little ant that was not taken seriously tripped up the elephant.


In fact, this is not a market "wonder" that happened overnight. AliExpress' layout in the Korean market is more like a bottom-up entrepreneurial story. As early as four years ago, it started the first phase of infrastructure layout. In terms of logistics, it improved time efficiency. At the same time, it cooperated with forums and media such as Naver and Kakao to build a local traffic ecosystem. Subsequently, local payment and the layout of preferred warehouses in Weihai and Yantai were gradually developed, and logistics was directly improved to 3-5 days.


This strategy has now worked. As of April this year, AliExpress's monthly active users in South Korea have increased by 128% in two years, and the number of users has expanded by more than 150% in three years to 2.9 million (more than 10% of South Korea's e-commerce population).


The key for a platform to capture the minds of users in the existing market is to work hard on user experience.


Forbes pointed out that the reason behind AliExpress' rapid rise in South Korea is not only because of the Chinese-made products and price advantages, but also because the platform has optimized a lot of products and local user experience for Korean users. This has also maximized the user experience of the platform's people, goods and markets.


For example, starting from October last year, AliExpress has placed advertisements in more than 150 subway stations in South Korea, and the famous actor Ma Dong-seok became the first spokesperson, which has enhanced the image of AliExpress in South Korea.
At the same time, AliExpress has connected to South Korea's leading payment wallets KakaoPay, NaverPay, TossPay, as well as seven major bank partners and card groups to improve functions on the payment side.


In March this year , AliExpress launched Choice in South Korea, focusing on high cost-effectiveness and high-quality services, free shipping, free returns and 3-5 day delivery. This has caused the Korean overseas shopping market, which has been content with the status quo for many years, to begin to re-examine how to do "overseas shopping".


02Merchants flocked to Korea following AliExpress


Such a Korean market has also attracted the attention of many Chinese sellers.


As early as a few years ago, AliExpress seller Liu Zheng began to pay attention to the Korean market. However, before that, the business chain of large furniture in Korea was not smooth. Not only did he have to ship the goods himself, but he also had to ship them by sea, which was neither convenient nor time-effective. However, with the gradual completion of AliExpress's Shandong Preferred Warehouse in the past two years, Liu Zheng realized that the development opportunity he had been waiting for had finally arrived.


Figure: The straight-line distance from Weihai to Seoul is only 400 kilometers, which is closer than that from Weihai to Jinan.


What made Liu Zheng's product popular overnight was a "boxed mattress". In the trend of "living alone", young Koreans like to stay up late, value sleep but are unwilling to spend more money. Liu Zheng targeted this trend and launched a boxed mattress that only costs 60,000 won (about 300 yuan) . The most important thing is that through the Shandong warehouse, the mattress can be delivered to a small apartment for one person in Korea within 3 days. It became a hit in Korea as soon as it was launched.


Zhang Haiying, who relied on the Korean market to "revive" her own factory, also had a deep understanding of the market opportunities on AliExpress.


Zhang Haiying was originally a traditional trade seller specializing in umbrellas. In the past two years, domestic trade has been severely price-pressed and profits have been low, and foreign trade has been affected by the global epidemic. Business has declined sharply, and Zhang Haiying's parents even planned to close the factory.


But around October last year, Zhang Haiying transferred all businesses to AliExpress. In just half a year, she "revive" her own factory through AliExpress.


"When doing business in the Korean market on AliExpress, products must have the right keys for the right locks. For example, Koreans like thick, sturdy umbrellas, so we launched a golf umbrella specifically for Korea." Zhang Haiying introduced the successful experience of doing business in the Korean market on AliExpress.


03The success of the Korean model will be "copied" to more emerging markets


These are just a microcosm of AliExpress's global expansion. AliExpress is replicating the success of the "Korean model" in other national markets.


Figure: AliExpress is replicating the experience of the "Korean model" to other overseas markets


Since the beginning of this year, AliExpress has launched new actions in many countries with an aggressive attitude. Starting from the end of February this year, AliExpress has launched Choice channels in 55 overseas countries. According to previous reports, the Choice channel is a full-hosting model for merchants in China, and overseas it focuses on consumer experience. Consumers can buy more cost-effective products and get free shipping and faster logistics delivery. The 1st to 3rd of each month are fixed Choice Days, and the products will be further discounted.


Data shows that Choice has maintained high growth since its launch and has driven AliExpress into a growth track. In March this year, AliExpress's orders increased by more than 50%, and the growth rate in South Korea even exceeded 100%.


In the eyes of many people, the success of the "Korean model" has become a replicable methodology for AliExpress to "overtake on the curve" in emerging markets, including investment in logistics construction, differentiated goods, and a series of user experiences created by the platform for local consumers. It is foreseeable that this "Korean-style successful experience" will also be replicated and verified in more emerging markets in the future.

AliExpress

South Korea

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