Under tariff pressure, 'China’s Amazon’ targets Korea in strategic shift from US
As Chinese e-commerce players contend for market share in neighboring South Korea — an apparent hedge against tightening access to the US — JD.com has entered the fray, armed with its own logistics network.
JD.com, one of China’s leading e-commerce platforms alongside AliExpress and Temu, sets itself apart with a direct-purchase model in contrast to the open-market approach favored by its peers.
Last week, JD Logistics, the supply chain arm of JD.com, opened two self-operated logistics centers in Incheon and Icheon, Gyeonggi Province, marking the first time a Chinese e-commerce company has established its own warehouses on Korean soil.
According to JD.com, the centers offer third-party fulfillment and 12-hour delivery across parts of Seoul and Gyeonggi Province. The Incheon hub handles logistics for US consumer goods and Korean beauty brands targeting overseas markets, while the Icheon center specializes in pet products.
“Consumers in South Korea expect fast and precise delivery,” said an official from JD Logistics. “By combining our automation capabilities with global operations expertise, JD Logistics is well-positioned to support local brands and enhance customer satisfaction.”
JD Logistics also connects Korean products directly with Chinese consumers via JD.com’s cross-border e-commerce platform, the company explained. The company’s global logistics network now spans over 100 warehouses across 19 countries.
JD.com’s expansion into Korea may seem abrupt, but its footprint in the country dates back to 2018, when it set up JD Korea, a subsidiary tasked with wholesale and retail sales, e-commerce and telecommunications. In 2022, it secured a license for cross-border freight services.
Industry insiders see JD Logistics’ new centers as a step toward entering Korea’s e-commerce market.
Its apparent push to court Korean consumers adds to the unease among domestic firms already grappling with slowing growth and declining performance.
“JD.com has typically prioritized building its own logistics infrastructure when entering new markets, and this move appears to follow the same playbook,” one industry official said. “A full-scale launch into the Korean market now seems only a matter of time.”
JD.com’s foray into Korea is likely to set the stage for a rivalry with Coupang, the country’s e-commerce powerhouse, as both companies prioritize speed and logistics through infrastructure-driven models.
“The influx of low-cost Chinese products is likely to expand, intensifying cutthroat competition with Korean e-commerce platforms like Coupang,” another industry official noted.
JD.com reported annual revenue of 1.16 trillion yuan ($160 billion) last year, more than five times Coupang’s 41 trillion won ($29 billion) in sales. While Coupang is listed on the New York Stock Exchange, JD.com trades on the Nasdaq.
As macroeconomic tides shift with sluggish domestic growth in China and rising trade tensions with the US, Chinese e-commerce firms are extending their reach into overseas markets with stronger growth potential.
The US government’s recent move to end tariff exemptions on Chinese imports under $800 also motivates Chinese e-commerce giants’ advance into Korea, a high-stakes market where their platforms are rapidly gaining ground.
According to market research firm WiseApp, AliExpress and Temu’s combined transaction volume in Korea reached an estimated 4.28 trillion won last year, up 85 percent from the year before. In 2021, the figure was just 1.1 trillion won, before crossing the 2 trillion mark in 2023.
minmin@heraldcorp.com
