Alibaba and Coupang Battle to Take Over South Korea’s E-commerce Industry

Alibaba and Coupang

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 Inc (NASDAQ:AMZN).

Alibaba Group

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.

Coupang Store

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.

Nate O'Hara
Nathan is a seasoned commerce writer with a passion for unraveling the intricacies of the business world and distilling them into engaging narratives. During his academic journey, he delved deep into subjects like economics, marketing, and entrepreneurship, honing his analytical skills and developing a keen understanding of market dynamics.