Alibaba Group Holding Limited (NYSE:BABA), through its online platform AliExpress, has significantly expanded its footprint in South Korea, doubling its user base to 8.58 million by April, according to Wiseapp.
Alibaba has allocated $1.1 billion to South Korea to establish a new logistics center.
This move is part of its strategy to compete with domestic e-retailer Coupang, Inc (NYSE:CPNG), which is heavily investing in advanced technologies and logistics, inspired by Amazon.com Inc (NASDAQ:AMZN).
Coupang reported a net loss of $24 million in the first quarter, marking its first loss in seven quarters. This loss was attributed to significant investments in AI-powered robots and an extensive network of delivery drivers, as reported by Nikkei Asia.
Alibaba’s net income dropped 86% to $453 million in the comparative quarter due to net losses from its investments in publicly traded companies during the quarter. Adjusted net income fell 11% year-over-year to $3.38 billion.
Coupang’s CEO, Kim Bom-suk, expressed concerns about the rising competition from Chinese e-commerce platforms offering low-priced products, such as AliExpress and PDD Holdings Inc (NASDAQ:PDD) Temu.
AliExpress’s strategy includes a $1.1 billion investment in a logistics hub and call center in South Korea, aiming to compete with Coupang’s quick delivery times.
Domestically, Coupang is also facing intense competition from Naver, which holds a 20% market share compared to Coupang’s 22%.
To diversify its offerings, Coupang is looking for new opportunities in grocery and food delivery, sectors where Chinese competitors face challenges.
