Alibaba expands Korean presence with ‘online mall’ strategy

2024.05.16 12:07:01 | 2024.05.16 12:24:29

[Photo by MK DB]이미지 확대

[Photo by MK DB]



Alibaba Group, which mainly targets Chinese consumers, recently established Korean subsidiaries for its platforms Taobao and Tmall and has drawn the industry’s attention to its underlying strategy. The consecutive emergence of various subsidiaries before the parent company’s entry into the market is viewed as the group’s typical approach to overseas expansion.

Alibaba Group has already succeeded in enhancing its market dominance by luring consumers via various platforms before devising e-commerce tactics in Europe and Brazil. According to retail industry sources on Wednesday, Alibaba Group is expanding its business in South Korea by launching various subsidiaries in addition to AliExpress. Notably, the group established Korean subsidiaries for Taobao and Tmall, the top two services in the Chinese e-commerce industry in terms of transaction volume, in January 2024.

Alibaba Korea and logistics management entities Cainiao Supply Chain Korea and Cainiao Korea Supply Chain Management have also established subsidiaries to broaden their business scope. While Lazada, which is responsible for the Southeast Asian market within the group, does not have a subsidiary in Korea yet, it is actively seeking Korean sellers and positioning itself as a gateway for expansion into Southeast Asia.

Alibaba Group has also strengthened its influence in local markets by consecutively introducing shopping malls in countries like Spain, Russia, and Brazil. In Spain, for example, Alibaba Group initially confirmed market potential with AliExpress, a Chinese product direct purchase app, before gradually expanding its service range. The group increased its local online shopping mall market share from 5 percent in 2020 to 8 percent in 2023 and announced the launch of Tmall Europe in June of that year. While AliExpress introduces low-cost products via a Chinese product direct purchase app, Tmall Europe connects local Spanish brands and consumers to provide reliable services.

In Europe, Alibaba Group is becoming a part of consumer lifestyles by continuously expanding various convenient services. It expanded rapid delivery services in Spain via logistics entity Cainiao on top of operating two AliExpress offline stores, and has deployed similar strategies in Russia and Brazil.

By Park Chang-young and Minu Kim

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