The e-commerce industry is closely watching the situation ahead of Alibaba Group’s B2B shopping platform ‘1688.com’ entering Korea. This is because domestic online sellers could take a direct hit if they launch a volume offensive with price competitiveness at the forefront.
According to the industry on the 10th, 1688.com, a Chinese domestic ‘business-to-business’ (B2B) service, is likely to enter the Korean market as early as this month.
Currently, many open market sellers, including Coupang, G Market, and 11th Street, are selling products through domestic e-commerce with a markup on products purchased through a delivery service from 1688.com.
However, if 1688.com enters Korea and sells directly at a lower price than open market sellers, the prospect that it will be difficult to hold on is growing.
If online sellers’ sales decline or sellers leave, there is a strong concern that it will be directly related to the sales of domestic e-commerce companies.
In particular, 1688.com is conducting a B2B service business in its home country, but there are concerns that its impact will be greater if it enters the domestic retail market.
When purchasing items from 1688.com, business registration is required, but since you can sign up as an individual member, the possibility of entering the retail market cannot be ruled out.
However, there are also predictions that it will not be easy for 1688.com to settle in the Korean market.
The biggest advantage of 1688.com is its price competitiveness, but this is based on the prediction that it will not be easy to establish itself in the domestic market if the quality of the product deteriorates. In addition, it is pointed out that it is not easy to simply change the existing usage and that customer churn will not be large in a situation where loyal customers have already been secured.
An industry official said, “The stability and reliability of the product are the key, and if the quality of the product is poor, it seems unlikely to have a positive impact on consumers.” He added, “It may be inevitable to some extent in the early stages of entering the market, but it is easy to maintain a long-term advantage with price competitiveness alone. “I don’t think it will happen,” he predicted.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.