Imagine purchasing a defective product from an overseas e-commerce platform, only to find yourself unable to seek recourse due to language barriers and complex procedures. South Korea is taking legislative action to address this common pain point in cross-border shopping.
Recently, South Korean lawmaker Kim Chang-kyum of the People Power Party proposed amendments to the Electronic Commerce Act, specifically targeting rapidly growing cross-border platforms like Temu and AliExpress. The core provision requires large-scale overseas e-commerce operators without local offices to appoint domestic representatives in South Korea.
The "Local Agent" System: A Safety Net for Korean Consumers
The proposed revision aims to establish a more robust consumer protection framework. If enacted, platforms would need to designate local agents responsible for handling various consumer issues including:
- Product quality disputes: Consumers could directly contact agents for returns, exchanges, or compensation regarding defective items.
- False advertising: Consumers may file complaints through agents about misleading product claims.
- After-sales service: Agents would assist with logistics issues, refunds, and other post-purchase concerns.
This system seeks to streamline dispute resolution and provide Korean consumers with protections comparable to domestic e-commerce platforms.
Enhanced Data Protection and Advertising Transparency
The amendments also introduce stricter regulations in two additional areas:
- Consumer data protection: Platforms must clearly disclose the purpose and retention period for collected user data, while providing opt-out options.
- Advertising disclosure: Mandates clear labeling when influencers receive compensation for product promotions to prevent deceptive marketing.
Rapid Growth Brings Regulatory Challenges
Cross-border e-commerce has seen explosive growth in South Korea, with platforms like Temu gaining traction through aggressive pricing strategies. However, the lack of local presence has created difficulties for consumers seeking redress.
The proposed legislation reflects growing concerns about consumer protection in an increasingly globalized e-commerce landscape. Similar regulatory challenges may emerge in other markets as cross-border platforms expand internationally.
Potential Shift Toward Localized Operations
If passed, the amendments could compel platforms to establish local offices, hire Korean staff, and strengthen customer service infrastructure. While increasing operational costs, such measures may improve brand perception and long-term market sustainability.