China’s e-commerce platforms help unlock global markets for South Korean brands
South Korean e-commerce companies are increasingly turning to Chinese platforms to help sellers tap rising demand for Korean products, offering a lower-cost route into China and other overseas markets without building local operations. 11street, one of South Korea’s major online marketplaces, recent
By Yeon Woo Lee
South Korean e-commerce companies are increasingly turning to Chinese platforms to help sellers tap rising demand for Korean products, offering a lower-cost route into China and other overseas markets without building local operations.
11street, one of South Korea’s major online marketplaces, recently opened a storefront on JD Worldwide, JD.com’s cross-border e-commerce platform, where about 700 million consumers have made at least one purchase over the past year.
The store carries products from about 350 Korean brands, led by beauty labels, processed foods, fashion items and health supplements. Sellers would only need to register their products, as logistics, marketing and other operations would be handled by platforms acting as intermediaries, the company said.
“We hope the store will serve as a catalyst for revitalising e-commerce between Korea and China,” said Shin Hyun-ho, executive director of corporate strategy at 11street.
Musinsa, South Korea’s leading fashion platform, also said on June 8 that it had partnered with Tmall Global to help Korean fashion brands reach more Chinese consumers.
The moves come as Chinese consumers account for an important share of South Korea’s cross-border e-commerce market, supported by the growing popularity of Korean products.
According to South Korea’s Ministry of Data and Statistics, the country’s online direct overseas sales reached 1.06 trillion won (US$700 billion) in the first quarter, topping the 1 trillion won mark for the first time in about four and a half years. China was the largest market by country, accounting for 376.3 billion won.
That demand is prompting more South Korean platforms to deepen ties with Chinese e-commerce operators, as the weak Korean won makes large-scale overseas investment less feasible, according to Humphrey Ho, CEO of investment firm Helios & Partners.
Such partnerships offer an alternative to setting up local subsidiaries or distribution networks, cutting costs while giving sellers access to established logistics, payment and customer-service systems. They can also help foreign brands navigate China’s strict regulatory requirements, analysts said.
“Similar to Waymo partnering with Uber, these collaborations are primarily about gaining immediate access to an established user base,” Ho said. “It allows companies to scale in-house capabilities before eventually operating independently.”
The strategy of using China-linked platforms is not limited to reaching Chinese consumers. Gmarket, another major South Korean e-commerce platform, took a similar route in September, partnering with Lazada, Alibaba Group’s regional e-commerce arm, to expand into Malaysia, Vietnam, Singapore, Thailand and the Philippines.
Gmarket, which had linked about 7,000 sellers and 1.2 million products to Lazada when it joined the platform, said sales had grown by nearly 150 per cent in March compared with January. It plans to expand its cross-border sales business in the second half into South Asia through Daraz and southern Europe, including Spain and Portugal, through Miravia, both Alibaba-owned platforms.
Alibaba owns the South China Morning Post.