Chinese e-commerce, represented by 'Ali·Te·Shi' (AliExpress, Temu, Shein), continues to expand its presence in Korea, with Chinese direct purchases exceeding 60% of the domestic direct purchase market. On the other hand, Korean product purchases by Chinese consumers are declining, leading to a surge in the direct purchase deficit with China to 3 trillion won, a 74.5% increase from the previous year. With the launch of the Trump 2 administration, there are predictions that C-commerce, facing difficulties in the US market, may intensify its 'low-price offensive' targeting Korea, the world's fifth-largest e-commerce market with an annual transaction value of 242 trillion won.

6 out of 10 domestic direct purchases are from China

According to Statistics Korea on the 11th, the estimated value of Chinese direct purchases by domestic consumers last year was 4,777.2 billion won, accounting for 60% of the total direct purchase value (7,958.3 billion won). This is a significant increase from 23.9% in 2020. Chinese direct purchase value, which was 1,039.9 billion won in 2020, has grown four times in four years, changing the leading digit every year. The gap with the US, which was 1,082 billion won in 2022, widened to 3,098.9 billion won last year. Lee Jong-woo, a professor of business administration at Ajou University, said, "C-commerce's strategy of choosing Korea as a market to dispose of goods in stock in their own country has led to growth."

The growth of C-commerce is based on affordable miscellaneous goods. According to Statistics Korea, among Chinese direct purchase products from 2020 to 2024, purchases of records, videos, and musical instruments increased by 859.2%, and computer and peripheral equipment (601.8%) and clothing and fashion (554.2%) also showed significant growth. In fact, domestic consumers cite 'low price' as the main reason for using C-commerce. A keyboard piano product sold for 119,020 won in domestic e-commerce is sold for 19,650 won on AliExpress (Ali). It is selling the same product at one-fifth of the price, although it is unknown whether it is a counterfeit. Song (29), who recently purchased a musical instrument from Ali, said, "It's several times cheaper than other places, so I can't help but use C-commerce." Professor Lee said, "It seems that they have overcome the aversion to counterfeits and the risk of harmful substances to the human body with low prices."

C-commerce expanding the Korean market

While domestic consumers' purchases of Chinese products are increasing, Chinese consumers' purchases of Korean products are rapidly decreasing. Online sales of direct purchases to China, which was 5,200.5 billion won in 2020, plummeted to 977.7 billion won last year, one-fifth of the level. An industry official said, "Sales have decreased due to the effects of China's 'Guochao' movement of patriotic consumption and the expansion of anti-Korean sentiment after the THAAD retaliation." As the imbalance in direct purchases to China continues, the deficit is also increasing. The deficit, which was 913.7 billion won in 2022, more than tripled in two years to 3,799.5 billion won last year.

C-commerce, which has successfully established itself in the Korean market, is now aiming for direct entry. There are many predictions that after the launch of the Trump 2 administration, it will be difficult for the US business to succeed, so Korea will be the main target and expand its business. Following Ali, Temu is also hiring Korean employees and preparing to build a logistics system.

There are concerns that if Chinese platforms directly enter the domestic distribution market and start full-scale marketing with a low-price offensive, domestic e-commerce platforms as well as small and medium-sized manufacturers will face difficulties. Professor Chung Yeon-seung of Dankook University's Business School said, "Strengthening the competitiveness of domestic sellers and supporting sales channels are ways to solve the trade imbalance."

Chinese e-commerce giants target Korea with 'low-price offensive'

The Korean direct purchase market is dominated by Chinese e-commerce platforms, with Chinese products accounting for over 60% of all direct purchases. This is due to the low prices of Chinese goods, which are attracting Korean consumers despite concerns about quality and safety. However, this trend has led to a significant trade deficit with China, as Chinese consumers are buying fewer Korean products.

The situation is likely to worsen as Chinese e-commerce giants are planning to expand their presence in Korea. With the US market becoming less attractive under the Trump 2 administration, these companies are focusing on Korea as a key market. They are expected to launch a full-scale 'low-price offensive', which could put pressure on domestic e-commerce platforms and small and medium-sized manufacturers.

Experts say that it is important to strengthen the competitiveness of domestic sellers and support their sales channels in order to address the trade imbalance and protect the domestic industry.

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