The South Korean e-commerce landscape is witnessing a dramatic three-way competition as cross-border platforms AliExpress and Temu emerge as dark horses, rapidly capturing market share. Last year, their combined sales in Korea surpassed the 4 trillion won mark, presenting a formidable challenge to domestic leaders Coupang and Naver.
Explosive Growth Figures
Data from WiseApp and Retail reveals staggering projections for 2024: AliExpress anticipates 3.6897 trillion won in Korean sales, while Temu follows closely with 600.2 billion won. Their combined 4.2899 trillion won represents an 85% year-over-year growth, signaling both the activation of cross-border e-commerce potential and shifting consumer behaviors in Korea.
Deeper analysis shows intriguing patterns. As of December, average spending per AliExpress customer reached 88,601 won compared to Temu's 72,770 won. Gender distribution reveals AliExpress's predominantly male user base (73.1%) versus Temu's balanced 50.9% female and 49.1% male split, suggesting differentiated market positioning.
Strategic Advantages
The platforms' success stems from precise targeting of Korean consumers' demand for value-priced goods coupled with savvy digital marketing. Last month's metrics show 9.124 million monthly active users for AliExpress and 8.234 million for Temu—a substantial foundation for sustained growth.
Established Local Competition
However, the newcomers face entrenched rivals. Coupang, Korea's top e-commerce player, projects record 2024 sales of 40 trillion won (approximately $27.7 billion), while Naver's platform anticipates exceeding 50 trillion won in gross merchandise value. Their success derives partly from premium membership programs offering delivery perks and supplementary services.
Meanwhile, smaller domestic players like Gmarket and SSG.COM reported 16.4% and 6.2% sales declines respectively through last September, with 11Street seeing a 28.9% drop—evidence of market concentration toward dominant players.
Future Strategies
For AliExpress and Temu to maintain momentum, several critical factors emerge:
- User experience optimization: Streamlining interfaces, checkout processes, and fulfillment systems
- Localized operations: Tailoring offerings to Korean preferences and shopping behaviors
- Product diversification: Expanding catalog breadth while preserving value positioning
- Brand building: Enhancing credibility and emotional connection with Korean consumers
- Regulatory compliance: Maintaining strict adherence to Korean consumer protection standards
The impending merger between Shinsegae and Alibaba adds further intrigue, potentially disrupting the current duopoly. As the Korean e-commerce arena continues evolving, these global platforms must demonstrate sustained innovation to convert early successes into lasting market position.