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Korea Herald
06-07-2025
- Business
- Korea Herald
Korean e-commerce turns outward amid China's pressing market incursion
Coupang raises stakes in Taiwan market; Kurly eyes US entry after pilot program; Musinsa pushes into two Asian neighbors South Korean e-commerce players are going global not just to offset muted domestic consumption, but also in part to hedge against China's aggressive advance on their home turf. Their international forays come at a time when global fascination with K-food, K-beauty and K-fashion is running high. One successful market entry is that of e-commerce giant Coupang, which has been doubling down on Taiwan since entering the market in 2021, already investing nearly 500 billion won ($367 million) in logistics infrastructure and product sourcing. Earlier this year, the company launched its Rocket Delivery membership in Taiwan while expanding its local delivery network. In the first quarter, the company posted net revenue of over $1 billion in its Developing Offerings segment, which includes its international business, Coupang Eats, Coupang Play and luxury platform Farfetch, marking a 78 percent on-year surge on an FX-neutral basis. Coupang said its growth businesses, particularly its operations in Taiwan, helped drive the increase in earnings. 'We're seeing an increase in repeat customer rates and spending in Taiwan,' Coupang founder and CEO Bom Kim said during an earnings call in May. He added that the more the company invests in the Taiwanese market, the stronger its confidence grows. In January, Coupang re-entered the Japanese market with its food delivery app, Rocket Now, after withdrawing from the country in 2023, this time with a renewed focus on food delivery rather than quick commerce. Other e-commerce companies are also testing the waters. For instance, Kurly plans to begin beta testing its US operations this Tuesday, gathering feedback from local residents on its shopping and delivery services in preparation for a full-scale launch. 'Based on the results of the pilot service, we will adjust our logistics operations and our entry plans,' a Kurly official said. Fashion platform Musinsa is pressing ahead in Japan and China. After establishing its Japanese subsidiary in 2021, it set up its Chinese unit this April. Musinsa CEO Park Joon-mo said that the company will open its first brick-and-mortar store in Shanghai in the second half of this year and roll out physical stores in Japan by the first half of next year. The impetus to enter global markets stems partly from the rapid encroachment of Chinese platforms like AliExpress and Temu, combined with a stark slowdown at home -- domestic online shopping growth plunged to the 5 percent range last year, down from 20.2 percent in 2021, according to Statistics Korea. 'While Chinese platforms have faced recurring quality and privacy concerns, there remains a stable base of demand in Korea,' one industry insider noted. 'Domestic growth is nearing its limits, and the influence of China's price-first platforms is growing rapidly. As of February, AliExpress ranked second in general e-commerce app usage with 8.73 million monthly active users, followed by Temu in third with 7.84 million, both trailing only Coupang, according to WiseApp data. Worse yet for Korean e-commerce firms, one of China's leading platforms alongside AliExpress and Temu, opened two self-operated logistics centers in Korea in April, the first instance of a Chinese e-commerce company owning warehouses on Korean soil. Chinese lifestyle brand Miniso, often regarded as China's equivalent to Korean dollar store chain Daiso, has been making a comeback since last December, most recently opening a flagship store near Seoul's Gangnam Station in June.
Korea Herald
20-04-2025
- Business
- Korea Herald
Naver, Kurly form alliance to challenge Coupang in fresh food e-commerce
Naver and Kurly have formed a strategic alliance in an apparent move to challenge Coupang, the unrivaled No. 1 in the nation's crowded e-commerce market. The collaboration is widely seen as a complementary match between an e-commerce player that specializes in fresh food and a tech-driven platform giant. Under the partnership announced Friday, grocery delivery service Market Kurly's products will officially launch on Naver's artificial intelligence-powered shopping platform, Naver Plus Store, later this year. For Naver, the move helps shore up a weak spot in the fresh food category, while Kurly, in return, gains access to Naver's vast user base as an expanded sales channel. 'Kurly and Naver have unique competitive strengths that other platforms can't easily replicate, making us ideal partners,' said Kurly CEO Sophie Kim. 'The new partnership with Kurly, known for its fresh food curation, will further enrich Naver's commerce ecosystem by attracting more users to experience quality service and high-grade products,' said Naver CEO Choi Soo-yeon. As of last year, Naver and Coupang's estimated e-commerce transaction volumes stood at 50 trillion won ($35.1 billion) and 55 trillion won, respectively. Coupang, which first surpassed 1 trillion won in annual sales in 2015, has grown its business some 40-fold in just nine years. Naver is doubling down on strengthening its shopping division — which accounts for roughly 27 percent of its total revenue — building on its strong foothold in categories like fashion, beauty and electronics. In recent years, fresh food has emerged as a highly strategic category in the domestic e-commerce market due to its frequency of purchase and high repeat rates, which help build customer loyalty — a key driver of long-term platform growth. Coupang currently dominates the next-day fresh food delivery market through its vertically integrated model, including Rocket Delivery and Rocket Fresh. Although Kurly was the first in Korea to launch such a service in 2015, Coupang's aggressive, capital-fueled expansion since 2018 has pushed it ahead. Over the years, Naver has pursued an open-market strategy, partnering with retailers like E-mart Mall and Homeplus, and even forming a stock-swap alliance with Shinsegae. However, the lack of its own logistics network has limited its competitiveness in fast delivery. With Kurly's dawn delivery infrastructure, Naver now has a chance to fill that gap. Industry watchers are also paying attention to whether the partnership could help reignite efforts for a Kurly initial public offering. Kurly passed a preliminary listing review in 2022, but reportedly shelved IPO plans the following year after failing to secure a valuation that met expectations. Meanwhile, Korea's e-commerce landscape is heating up amid rising pressure from fast-expanding Chinese platforms. The estimated annual transaction volume for AliExpress and Temu combined reached 4.3 trillion won last year — an 85 percent increase from the previous year, according to WiseApp and Retail. In response, traditional e-commerce companies in Korea are starting to seek out survival strategies. Shinsegae Group subsidiary Gmarket has announced plans to establish a joint venture with Alibaba International. The goal is to create a powerful new shopping platform by combining Shinsegae's strong domestic presence and brand trust with Alibaba Group's information technology capabilities.
