[Photo by Yonhap]

Alibaba.com is set to launch the ‘Korea Pavilion,’ a dedicated B2B platform for South Korean businesses, on August 8th, 2024. The move is expected to aid Korean small and medium-sized enterprises (SMEs), which have struggled to compete in the online marketplace, in their efforts to expand internationally. But there are concerns that Alibaba Group could encroach on the Korean retail industry even further, impacting both the local and export markets.

Alibaba.com held a press conference in Seoul on Monday under the theme “Accelerating Global Sales of Korean SMEs.” Alibaba.com Vice President Andrew Zheng said, “Alibaba.com is a leading global B2B online platform. Our goal is to help 5,000 Korean SMEs enter the online B2B trade market moving forward.” He added, “Various e-commerce platforms within Alibaba Group, including Alibaba.com, will leverage their unique business strengths to support the growth of Korean SMEs and brands.”

According to Alibaba Group, Korean products worth 34 trillion won ($24.54 billion) have been exported to China and Southeast Asia since 2020 via its platforms such as Taobao, Tmall, and Lazada. Alibaba reports that 7,600 Korean brands have entered the Chinese market thanks to Taobao and Tmall, with around 100 million Chinese consumers purchasing Korean products annually. Additionally, 2,550 Korean SMEs have entered the global market via Alibaba.com’s B2B business.

The newly introduced Korea Pavilion on Alibaba.com is a dedicated website for Korean enterprises and is the first time Alibaba.com has launched a country-specific site in the Asian region. Zheng emphasized that “Korean SMEs have faced challenges with e-commerce, so we have introduced various services to address these issues. The Korea Pavilion will make it easier for them to start exploring overseas B2B sales channels.”

The launch of the Korea Pavilion has elicited mixed reactions within the distribution industry. Although there is optimism that Korean SMEs, which have struggled to penetrate overseas markets, will gain significant momentum, there is also apprehension that the direct sales market, currently dominated by Chinese e-commerce platforms, could encroach on Korean exports further. Excepting Coupang’s direct sales operations in Taiwan, most Korean online shopping malls have yet to actively engage in the reverse direct purchase market.



By Park Chang-young and Minu Kim

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Source: Pulse by Maeil Business News Korea (July 23, 2024)