The Korean market incursion of C-commerce (Chinese e-commerce) is entering a new phase. Last year, first-generation C-commerce platforms such as AliExpress, Temu, and Shein rapidly grew based on cost-effectiveness; however, consumer fatigue due to controversies over counterfeit goods and security has dampened this growth. In this situation, JD.com, known as the 'Amazon of China,' is making a serious entry into the Korean market, leveraging its own logistics subsidiary.
According to the retail industry on the 23rd, JD's Korean subsidiary, JD Korea, has recently built its own logistics centers in Incheon and Icheon, marking its entry into the domestic market. The Incheon logistics center will serve as a warehouse for logistics for American global consumer goods brands and exports for domestic beauty corporations, while the Icheon center will be used as a dedicated logistics center for pet commerce corporations.
◇ 'Amazon of China' JD takes a different approach from Ali and Temu
Founded in 1998, JD.com has adopted an 'Amazon-style model' based on direct purchases and sales, ensuring genuine products and next-day delivery, establishing itself as a distribution giant in China. As of 2023, its revenue stood at 1.1488 trillion yuan (approximately 228 trillion won), surpassing Alibaba (1.0192 trillion yuan) and Pinduoduo (393.8 billion yuan). Compared to Coupang, the leading e-commerce platform in Korea (approximately 41 trillion won), JD's scale is more than five times larger.
The industry is noting that JD's entry into Korea is different from that of Ali and Temu. While Ali and Temu focus on the sale of ultra-low-cost products, JD is implementing a localization strategy based on logistics infrastructure, having directly built logistics centers to ensure delivery within 12 hours and reverse logistics services. If Ali and Temu are merely leveraging Korea as a consumer market, JD is opting for a long-term approach to position Korea as a supply base for Chinese exports and a strategic hub.
AliExpress has also agreed to establish a joint venture (JV) with Shinsegae Group in a 50-50 ratio, aiming to secure domestic logistics networks and build a support system for sellers. Temu will also fully open its platform and expand recruitment of Korean sellers. This is to conclude the pilot operation that has been conducted through an invitation process and to fully launch into the Korean market. First-generation C-commerce platforms are also shifting towards a 'localization phase 2' through securing logistics and sellers.
These moves are aligned with strategies to bypass the tightening public regulations being enforced in the United States. U.S. President Donald Trump has hinted at strong trade pressures, including the withdrawal of duty-free benefits for small packages from China and Hong Kong. As a result, Chinese e-commerce corporations are showing movement to establish new forward bases in places like Korea instead of the U.S.
◇ A new chapter opens in logistics competition beyond ultra-low-price offensives
Moreover, JD's 'genuine products-centered strategy' represents a clear differentiation from existing C-commerce. While Ali and Temu rapidly penetrated the domestic market with ultra-low-price policies, they have struggled to secure consumer trust due to issues like personal information leaks, counterfeit goods, harmful substances, and delivery delays.
In fact, the existing first-generation C-commerce platforms are showing signs of stagnation. According to data on monthly active users (MAU) released by Wise App and Retail as of April, Coupang maintained the top position with 33.39 million users, followed by 11Street with 8.93 million users in second place. Ali (8.8 million) and Temu (8.47 million) dropped to third and fourth places, respectively. This represents a reversal from earlier this year when Ali and Temu held second and third places.
Notably, JD's intention to utilize Korea not merely as a sales market but as a 'fulfillment hub' that operates logistics directly and as a 'reverse logistics base' for sending Korean products to China is a significant difference from existing Chinese C-commerce companies. This raises the possibility of expanding beyond simple B2C (business-to-consumer) transactions directed at consumers to B2B (business-to-business) services targeting domestic brands and cross-border logistics competition.
For Coupang, the leading e-commerce company in Korea, while there may not be significant immediate changes in market share, there are analyses suggesting that JD’s presence could pose a burden in the medium to long term. Particularly, if JD accelerates its reverse logistics and brand acquisition efforts, there is speculation that this could directly conflict with Coupang’s own brand and global fulfillment business.
An industry official noted, 'JD is approaching the market in a way that emphasizes logistics operations and genuine product distribution, which differs from existing C-commerce. Now, the entry into the Korean market has entered a 'second act' beyond ultra-low-price competition, and domestic platforms, including Coupang, will also need to respond with new strategies.'