In 2023, the battle in the North American e-commerce arena is still going on fiercely. SHEIN, Temu and TikTok Shop are trying to snatch food from Amazon's "tiger's mouth" with the mysterious oriental power - the full hosting model.
However, as one of the four little dragons going overseas, AliExpress seems to have no intention of lingering on the turmoil on the other side of the ocean. It resolutely picked up the "golden spoon" of full-service management and rushed to the Korean cheese at its doorstep.
"All the things I bought are stuck at Pyeongtaek Customs. Is there something wrong with the customs?" "Since April, the delivery speed of items purchased on AliExpress has been significantly slower." "Pyeongtaek Customs is paralyzed due to overseas direct purchases, and delivery will take at least a month." Back in May, South Korea's customs was going through the longest warehouse explosion in history. Tens of thousands of packages were piled up in the warehouse, and a large number of consumers were anxiously waiting for the stagnant logistics to move. The "culprit" of all this was AliExpress, which was overwhelmed by the enthusiasm of Korean consumers: during the 618 preheating period, orders soared rapidly, causing congestion in Pyeongtaek Customs. This scene seems familiar. At the end of last year, the "Double Eleven" shopping culture came to South Korea with AliExpress, setting off a reverse overseas shopping craze in the local area. In order to cope with the sharp increase in cross-border packages during the promotion period, the Korean Customs Service once set up 6 teams to support customs in various places and work overtime to handle import and export business. The surge in orders indicates that while e-commerce giants are fighting fiercely in North America or competing for the emerging blue ocean, AliExpress has quietly taken over the world's fifth largest e-commerce market on its doorstep. We all know that South Korea is actually a rather "exclusive" market. On the one hand, this is mainly due to the local consumers' enhanced awareness of protecting local brands , and on the other hand, it depends on the fierce competition among local e-commerce companies : Coupang, 11thStreet, and Shinsegae Group are the three major players. For a long time, Korean consumers have been stuck in the stereotype that Chinese manufacturing is rampant with counterfeits. In addition, platform support policies are mostly tilted towards local brands, so it is not easy to grab a share of the Korean market. However, with the leap and transformation of Made in China, the voice of Chinese brands in Korea is also increasing. AliExpress is taking advantage of this opportunity to play the story of an ant tripping over an elephant in the Korean market dominated by giants. During the Double Eleven event in 2022, AliExpress surpassed a number of local e-commerce platforms such as Coupang and topped the list of shopping app downloads in South Korea. On AliExpress, gaming keyboards, fascia guns, coffee machines, blind boxes and other fashion products produced in China are being snapped up by Korean shoppers. Data from Cainiao and AliExpress show that in 2022, the number of parcels shipped from the Preferred Warehouse to South Korea soared by more than 300% year-on-year, and the shipment volume during the Double Eleven period was about five times that of normal days. However, this is not just a temporary boom under the big promotion effect. In March this year, AliExpress once again became the most downloaded shopping app in South Korea, breaking the dominance of the second-hand trading app "Carrot Community" for nearly three years. In addition to download volume, AliExpress also "sniped" the local giants in terms of user usage time. According to a study by Forbes Korea, among the 2.5 million crossover users of AliExpress and Coupang, the average usage time of AliExpress was 2.69 hours, while that of Coupang was 2.3 hours. Since May 2020, the number of AliExpress users has expanded by more than 150%, and the number of active users in South Korea has soared by 128% in the two years ending in April. There is no doubt that this Chinese shopping app is being loved and accepted by more and more Koreans. According to WiseAppRetailGoods, as of September this year, the number of Korean users of the AliExpress mobile app has soared to 5.45 million, a 3.6-fold increase from 1.52 million in September 2020. It has also more than doubled from 2.74 million in September last year. But perhaps there are still many people who can't help but be curious. In South Korea, where local companies are highly protective, how did AliExpress snatch food from giants such as Coupang and 11th Street?
The saying “products start with demand, stand on value, and last for experience” is also true for e-commerce platforms. High-quality consumer experience will attract more customers to the platform, promote the natural growth of traffic, and then gather the rivers, lakes and seas of merchants to form a vast ocean of goods, and finally form a reinforcing loop. Where does a high-quality user experience come from? From products, payment to logistics, after-sales, from basic supporting facilities to diversified platform services. Therefore, this requires the platform to move towards refined operations in all aspects, from users to users. In the face of a stock market dominated by local e-commerce companies like South Korea, if you want to snatch the cheese of user minds from the giants, user experience is both the fundamental starting point and the final destination. AliExpress's approach to market development in the South Korean market is based on this. Laying a solid foundation for logistics is the first prerequisite. AliExpress, together with Cainiao, has built Weihai and Yantai warehouses in Shandong, which is adjacent to South Korea. As many as 93% of the goods purchased from the Weihai warehouse arrive in South Korea for customs clearance the next day after entering the warehouse, and most Korean consumers can receive the package within 3 to 5 days after placing the order. Secondly, start with platform security services. To this end, AliExpress chose to show off a new weapon - the Choice service was launched in South Korea in March this year, aiming to provide Korean users with free shipping, free returns and exchanges, and delivery within 3-5 days, as well as a variety of cost-effective products. Of course, for a platform exploring new markets, the key to improving user experience lies not only in infrastructure and platform services, but also in sellers. The influx of third-party sellers has enriched the platform ecosystem and brought more diverse product categories. However, as the platform scales up, it has also bred more and more "instability" - counterfeit products are mixed, vicious competition is becoming more rampant, and seriously affecting the brand image and user trust. Especially in a country like South Korea that is keen on "refined life" and pays special attention to quality, if the platform cannot ensure a healthy and good consumption environment, it will be difficult to compete with local e-commerce giants. Therefore, AliExpress, which urgently needs to further open up the Korean market, chose to leverage full-hosting - under the full-hosting model, AliExpress is able to fully undertake complex links such as store operations, logistics fulfillment, and after-sales service, while merchants only need to be responsible for product creation and supply. Controlling each sales link also means that AliExpress has absolute say: first, it controls pricing to ensure cost-effectiveness; second, it is conducive to controlling product quality; third, it can coordinate and integrate supply chain resources. On the other hand, full trusteeship has access to more abundant supply chain resources - factory-based and industrial and trade-integrated sellers. The entry of source manufacturers not only promotes the platform to attract new users, but also promotes the upgrading of merchant competition to a certain extent, forcing sellers to strengthen product strength and brand building, thereby giving birth to more high-quality merchants. Whether it is controlling costs on a large scale, establishing the ultimate cost-effectiveness advantage, or attracting high-quality sellers and brands, the ultimate goal will be to improve user experience.
Following in the footsteps of AliExpress, more and more Chinese merchants are eyeing South Korea, a "huge market right at their doorstep." In fact, for many sellers, South Korea is not a high priority in their choice of destinations for overseas gold rush. Those seeking high growth potential are heading to mainstream markets in Europe and the United States, while those eyeing the huge incremental space in emerging markets are heading directly to Southeast Asia and Latin America. Although South Korea enjoys a relatively high per capita consumption level as a developed country, local e-commerce platforms have almost monopolized the market ecology. For Chinese merchants and brands that are new to the country, they face not only operational difficulties due to unfamiliarity with the place, but also "discrimination" from the platforms. Local brands naturally have an advantageous position, and both traffic exposure and support policies tend to be more inclined towards them. However, South Korea, which is so "xenophobic" and easily overlooked, is also the fifth largest e-commerce market in the world. Data from GlobalData shows that the compound annual growth rate of South Korea's e-commerce market will reach 17.4% between 2018 and 2022, and is expected to continue to grow. The market size is expected to exceed US$160 billion in 2027. As cross-border platforms such as AliExpress penetrate deep into South Korea, South Korea is no longer a market that can be seen but not touched. South Koreans have always had a strong demand for overseas shopping, and Chinese e-commerce platforms that are committed to "user experience as the core" and the continuous upgrading and transformation of Chinese manufacturing have gradually disintegrated the stereotype of "rampant counterfeiting" in the past and have taken on more and more overseas shopping needs. On November 5, Yonhap News Agency quoted data from the Korea Statistics Office as saying that the total amount of cross-border online shopping in South Korea in the first nine months of this year reached 4.79 trillion won (about 3.65 billion US dollars), of which cross-border purchases from Chinese sellers reached 2.22 trillion won, accounting for nearly half of the total purchases. More importantly, the barriers between Chinese sellers and local brands are being broken down. There is a popular saying on the Internet: "Japanese people don't eat, Koreans don't sleep. Red ginseng in the left hand keeps them alive, and coffee in the right hand keeps them alive." Behind this is the extremely inward-looking and high-pressure social ecology of South Korea. The pressure of further study, employment anxiety, housing problems, and retirement security run through the lives of Koreans. In contrast to the "chicken blood society" that is struggling to survive, there is a downward economy and rising prices. According to data released by the Korea National Statistical Office, the consumer price index in October was 113.37, up 3.8% from the same period last year, a 7-month high. In this social context, people's consumption psychology has gradually changed, and they have begun to embrace high-cost-effective products and maintain a decent life through low-cost consumption. This is almost the right time and place for Chinese products - the strong supply chain foundation gives Chinese products a unique cost-effective advantage. More and more sellers have found that low prices have hit the soft spot of Korean consumers. The geographical proximity between China and South Korea has, to a certain extent, eliminated the barriers to product selection. "If you choose the right product and seize the opportunity, it is easier than you think to achieve explosive sales." The fascia gun brand Booster has experienced this. In 2021, it participated in the first promotion on AliExpress and sold out as soon as it was put on the shelves. At the beginning of the event, all stocks were snapped up, and the transport driver drove for 12 hours overnight to the Weihai warehouse to deliver the goods. During the Double Eleven period of the same year, Booster's popularity remained unabated - sales in South Korea soared 33 times compared with the previous year. For many sellers, the most unique advantage of going to South Korea is logistics. China and South Korea are close neighbors, and compared to the high first-leg logistics costs behind goods going to Europe and the United States, the geographical proximity greatly reduces delivery time and transportation costs. "Speed is the only way to win in the world of martial arts" is the rule of the Korean e-commerce industry. In a market where logistics are delivered at dawn, only by breaking through the logistics barriers can you have the capital to play at the table. "From the AliExpress Weihai warehouse to Incheon, South Korea, it only takes 3 days at the shortest." With the booming opportunities in the Korean market, more and more Chinese exporters are "reborn" here. A second-generation factory owner who mainly exports umbrellas revealed that due to the complex external environment in the past two years, his factory has lost a lot of orders and its business has fallen into a desperate situation. However, things took a turn for the better when the factory transformed its business and entered AliExpress Korea . The new store’s monthly sales exceeded 30,000 US dollars. The launch of the full-hosting model once again opened up new sales channels for its store, and many products have become hot-selling products. The factory, which was once on the verge of bankruptcy, "reborn" in the Korean market by relying on its supply chain and cost-effective advantages. Behind the sellers’ true stories, South Korea, this “treasure market” at your doorstep, is being coveted by more and more people going overseas. When the battle in Europe and America was raging, AliExpress took the lead in igniting the smoke of war at home. More and more sellers are withdrawing from the melee in Europe and America and rushing to the new battle in front of them.
|
