Armed with low-cost products, China has stepped up as Koreans’ top overseas direct purchase destination last year, overtaking the U.S.
Koreans spent a total of 6.75 trillion won ($5.08 billion) in direct purchases of overseas products online throughout the past year, a 26.9 percent jump from the previous year.
By countries, the overseas direct purchase market last year was driven mainly by China, which has several mega-sized online shopping malls, including AliExpress and Temu, to attract Koreans with their low-cost products and pervasive online promotions.
Out of the aggregated 6.75 trillion won that Koreans spent on overseas direct purchases, China accounted for 3.28 trillion won, or about 48 percent, posting a whopping 121.2 percent surge compared to the previous year.
The U.S., which had held the top position as Koreans’ most favored overseas direct purchase destination, saw its ranking drop to second place. The U.S. took up 1.85 trillion won of the annual transactions, or 27 percent, down by 7.3 percent compared to the year before.
China surpasses US as Koreans’ top overseas direct shopping destination
by Anna J. Park
The Korea Times
https://www.koreatimes.co.kr/www/biz/2024/02/175_368122.html
Armed with low-cost products, China has stepped up as Koreans’ top overseas direct purchase destination last year, overtaking the U.S. for the first time, according to Statistics Korea, Friday.
Koreans spent a total of 6.75 trillion won ($5.08 billion) in direct purchases of overseas products online throughout the past year, a 26.9 percent jump from the previous year. It is also an all-time high since the government started to collect the related data in 2014.
By countries, the overseas direct purchase market last year was driven mainly by China, which has several mega-sized online shopping malls, including AliExpress and Temu, to attract Koreans with their low-cost products and pervasive online promotions.
Out of the aggregated 6.75 trillion won that Koreans spent on overseas direct purchases, China accounted for 3.28 trillion won, or about 48 percent, posting a whopping 121.2 percent surge compared to the previous year.
The U.S., which had held the top position as Koreans’ most favored overseas direct purchase destination, saw its ranking drop to second place. The U.S. took up 1.85 trillion won of the annual transactions, or 27 percent, down by 7.3 percent compared to the year before.
In terms of product categories, sports and leisure products logged the highest year-on-year increase at 65.5 percent, followed by clothing and fashion-related items at 43.5 percent and goods related to daily life or automotive goods at 35.9 percent.
Experts view that China’s strength in the overseas direct purchase market is likely to persist for the time being, given that China’s huge consumer market is continuing to expand beyond some 6,000 trillion won, as well as the country’s robust and efficient online shopping landscape. The two factors work together to enhance the attractiveness to Koreans of direct purchases of low-cost Chinese goods through online malls.
“China’s massive domestic market is undergoing a significant reorganization and restructuring, centering on the e-commerce system,” said Park So-young, a researcher at the Korea International Trade Association (KITA), adding that the strong e-commerce-centric trend of the Chinese consumer market is applied to distribution channels of both imports and exports.
Another market analyst pointed to the fact that the year-on-year growth rate of Koreans’ overseas direct purchases from China is much higher than the overall annual growth rate of online shopping.
“The size of the overseas direct purchase market is still considered small, but it cannot be overlooked. The growth rate of the market is showing a higher rate compared to the overall online retail market growth, and China’s growth is particularly steep. There is a high likelihood that AliExpress and Temu will become significant players in the market,” said Suh Hyun-jung, an analyst at Hana Securities.
Suh went on to warn that if the popularity of direct purchases of low-cost Chinese goods continues, further advancing into essential goods and commodities, it could potentially have a significant impact on the domestic distribution sector, which is now centered around Coupang and Naver. The analyst added that when Chinese e-commerce businesses overcome the issue of trustworthiness, the Korean retail market could be affected further.
“If Chinese e-commerce shops set up exclusive logistics centers in Korea and secure some inventory through direct purchases in the country, delivery times could be further shortened, leading to additional decreases in the average selling price due to economies of scale,” Suh highlighted.
Meanwhile, last year’s total online shopping transaction volume, including both domestic and overseas, reached 227.3 trillion won, an 8.3 percent jump from the previous year. Yet, the growth rate has slowed down somewhat compared to 2021 when the annual increase stood at 20.2 percent and in 2022 when it reached 10.3 percent.
(sk)
韓国人が中国からモノを買い、中国人が韓ドラを見る。関係は深い。