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COVER STORY

Temu and AliExpress Popularity in Korea - Is It Okay as It Is?

Kicker: COVERSTORY Temu and AliExpress Popularity in Korea Is It Okay as It Is? By Su-Young Kim, Reporter /kimsuyoung@gmail.com Have you ever used Temu, AliExpress? Temu is an online marketplace platform under Pinduoduo that directly connects local Chinese producers and global consumers without an intermediate distribution process and sells inexpensive products in large quantities. AliExpress is like Temu, a site specializing in B2C (Business to Customer) operated by a subsidiary of Alibaba Group, a Chinese internet company. Looking at these platforms, the types of products sold are not only clothes and accessories, but also various products such as electronics, furniture, and auto parts at very low prices. In addition, these provide a convenient and fun shopping experience through mobile apps in line with consumer trends. These Chinese overseas direct shopping malls are very popular in Korea these days. Ali and Temu ranked No. 1 and No. 2 in mobile apps with the highest number of users in Korea last year. Contrary to the view that even if Ali and Temu enter Korea in the early days, only teenagers and those in their 20s with low economic power will use them, their use is expanding across all ages. Also, these are making a big impact by entering global markets such as the United States, Russia, Brazil, India. Let's find out why Temu and AliExpress suddenly became popular in Korea, and whether there is any controversy or concern arising from these issues. Temu and AliExpress, why are they popular? There are several reasons why these platforms are popular. Firstly,price competitiveness may be the biggest reason why consumers are enthusiastic about AliExpress and Temu. You can find the same item or similar item at half the price. Based on its enormous financial power, it is investing astronomical money in subsidies and logistics to use an ultra-low-cost strategy against the global market. As their parent company and major shareholders are global big tech companies, they have excellent platform operations and supply chain management, use data-based marketing strategies, and are quickly targeting the global market. Consumers do not have high expectations for quality because it is so inexpensive, but rather, when high-quality products for the price are delivered, they continue to purchase them on the site because they feel joy as if they have found a treasure. Secondly, it maximizes the time spent on the platform by inducing consumer interest by adding an element of games or gambling to shopping. As consumers experience events such as spinning roulette and drawing gifts on mobile apps, they become interested and try to buy them cheaper. Thirdly, it is an overseas direct purchase, but it is not difficult to purchase. It's an overseas item, but it doesn't require complicated procedures for delivery, and you can sign up by e-mail and write down your address in Korean as if you were shopping in Korea. You can even pay with Kakao Pay, a simple payment method. Lastly, even though it is an overseas direct purchase, the delivery is as fast as the domestic delivery. By drastically shortening the existing delivery period, consumers with resistance to overseas direct purchases were introduced. At the same time, it provided free returns and customer service (CS), showing the same service as domestic product delivery. In fact, I've used AliExpress before, and since the price is much cheaper than when I bought it in Korea, my satisfaction was maximized when I received a decent product, and I was able to easily purchase it due to this joy and low pressure. In addition, unlike Coupang, which is famous in Korea, I thought it was better than Coupang because it can be delivered right away for free without buying things in bulk. picture1https://www.globalsources.com/knowledge/temu-vs-aliexpress-which-is-the-winner/ The Problem with Temu and AliExpress However, controversy over Temu and AliExpress, which are gaining popularity worldwide in such a groundbreaking way these days, continues. Various problems have been raised, such as intellectual property infringement due to design theft, customs clearance issues for unverified products, and safety issues due to the discovery of carcinogens. Amid growing interest in domestic fashion brands in the global market recently, there are more cases of damage suspected of preempting the trademark right of "K-brand" by stealing it without permission around the world. Recently, as Chinese e-commerce platforms have expanded their influence in Korea, cases of unauthorized theft of trademark rights and damage to design copies have become more serious. In the fashion category of the platform, it is easy to find cases of intellectual property violations using Korean designer brand trademarks such as “Yale” and “Mmlg” without permission. In addition, unlike products that have been certified as National Certification Integration Mark (KC) through official import procedures, products that entered through the Chinese platform were brought into Korea without a separate safety verification procedure, causing problems. Chinese e-commerce companies receive benefits such as exemption from customs clearance and customs duties and exemption from KC certification obligations because they are direct overseas purchases. However, carcinogens have been detected more than 270 times the standard level in children's supplies sold at AliExpress recently. In response, the government came up with a plan to make safety certification mandatory for some items. The government announced, "measures to strengthen consumer safety in response to the surge in overseas direct purchases." Children's products or large electric household items that are likely to be fire-prone will be blocked from direct purchases unless they are certified by KC. In addition, measures to prevent products containing harmful ingredients from being brought into the country even if they have been certified for safety will also be implemented. In addition, to intensify personal information protection, AI monitoring is strengthened for overseas direct purchase platforms, and a system that matches and blocks information held by the Korean Intellectual Property Office (KIPO) and the Korea Customs Service (KCS) in real time is introduced. To sum up, Chinese shopping platforms such as Temu and AliExpress, which have won the hearts of people around the world with unconventional prices and delivery and services in the era of a high-price economy, are gaining popularity. However, controversy has recently arisen as various problems such as intellectual property infringement, lack of safety certification, and personal information infringement and contraction of domestic companies have been raised. Before we try these platforms, I think we need to know the overall situation and make sure we can consume them wisely. I think it is a smart way to consume it by using high-quality items that you need for a long time rather than buying a lot of various items because it is cheap. Sources: https://m.newspim.com/news/view/20240126000863 http://www.ktnews.com/news/articleView.html?idxno=131432 http://www.apparelnews.co.kr/news/news_view/?idx=211124 https://n.news.naver.com/article/030/0003206534?sid=101

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