Chinese e-commerce platform Temu is expanding its presence in South Korea, a move widely seen as in response to US President Donald Trump’s decision to end the small-parcel tax exemption for goods under $800 and impose an additional 10 percent tariff on Chinese imports.
On Tuesday, Temu announced plans to introduce a "local-to-local" model in Korea and to recruit Korean sellers for its online marketplace. Moving beyond its existing model of selling mostly Chinese products through direct overseas purchases, the platform will now facilitate direct sales and distribution of Korean products.
"The initiative will enable us to offer Korean consumers a diverse range of local products while providing Korean sellers with a new sales channel to connect with millions of customers," a Temu official said.
With the volume of direct overseas purchases in the US expected to decline significantly this year, Chinese e-commerce platforms like AliExpress are aggressively targeting Korea’s online shopping market as an alternative, leveraging an ultralow-price strategy.
Data from market research firm WiseApp & Retail shows that Korean consumers' estimated spending on AliExpress and Temu reached 4.28 trillion won ($3.42 billion) in 2023 — an 85 percent increase from 2.32 trillion won the previous year.
As of last month, AliExpress and Temu recorded 9.12 million and 8.23 million monthly active users in Korea, respectively, making them the second and third most-used platforms in the market after Coupang, which boasts 33.02 million.
"Despite ongoing reports highlighting concerns over product quality and counterfeit goods, at the end of the day, data clearly shows that Korean consumers continue to buy ultralow-priced products from Chinese e-commerce platforms," an industry insider said. "Amid the ongoing tariff war and China's economic slowdown, AliExpress and Temu’s heightened focus on the Korean market appears to be a calculated move with strong growth potential."
The official further noted that such expansion is not merely a reaction to Trump-era policies, but rather the culmination of years of strategic planning by the companies. "The competition within Korea’s e-commerce industry might reach an all-time high this year, leading to new landscapes."
After Temu launched a Korean-language online shopping platform in July 2023, it established its Korean subsidiary, WhaleCo Korea, in February last year, though the office has remained mostly inactive.
However, the company has recently been hiring Korean employees for key roles in human resources, administration and marketing — signaling its commitment to direct market entry.
Recently, Temu has also reportedly been negotiating long-term leases for a large logistics center in Gimpo, Gyeonggi Province, and forming partnerships with major logistics firms, although it has yet to disclose detailed plans for its Korean operations.
Temu’s Korean marketplace will be open to registered sellers who maintain inventory and can independently handle order fulfillment and shipping. The local-to-local model has already been rolled out in markets such as the US, Mexico, UK and Germany.
hykim@heraldcorp.com
