AliExpress, Temu surge in Korea, topping W4tr in transactions

(123rf)

Chinese e-commerce platforms AliExpress and Temu have been rapidly gaining traction in South Korea, reportedly generating over 4 trillion won ($2.7 billion) in transactions last year -- an 85 percent increase from the previous year.

According to data released on Tuesday by market research firm WiseApp Retail Goods, the combined transaction volume for both platforms was estimated at 4.28 trillion won, with AliExpress accounting for 3.69 trillion won and Temu for 600 billion won.

The combined figures have risen steadily from 1.1 trillion won in 2021 to 1.4 trillion won in 2022. In 2023, the total surpassed the 2 trillion won mark, reaching 2.3 trillion won.

The data only reflects private spending by Koreans aged over 20 through credit cards, debit cards and bank transfers, with the average spending per user last December being 88,601 won on AliExpress and 72,770 won on Temu.

Temu, in particular, has experienced dramatic growth, with its transaction volume surging from 31.1 billion won in 2023 to 600 billion won last year. As of January, while AliExpress had around 9.12 million monthly active users in the e-commerce sector, Temu had 8.23 million. Coupang led the market with 33 million monthly active users.

Recently, Temu has been reportedly pushing for expansion in Korea.

According to industry sources on Monday, PDD Holdings, Temu's parent company, is currently recruiting Korean employees across various fields, including human resources, administration, public relations and marketing. The company is also working on an integrated logistics system, sources said.

Temu officially entered the Korean e-commerce market in July 2023 and established its local subsidiary, Whaleco Korea LLC, in February last year.

Meanwhile, AliExpress, which made its official debut in Korea in 2018 and established its Korean entity AliExpress Korea in August 2023, has been strengthening its foothold as well.

Last December, Shinsegae Group and Alibaba International announced the formation of a joint venture between their respective e-commerce platforms, Gmarket and AliExpress Korea, aiming to strengthen their competitive position in the market. The joint venture is expected to begin operations in the first half of this year.