Navigating China’s E-Commerce Surge
Navigating China’s E-Commerce Surge
  • Choi Yeo-jin
  • 승인 2024.05.28 20:03
  • 댓글 0
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(Provided by Pixabay)
(Provided by Pixabay)

 

The rise of Chinese e-commerce as the epicenter of rapidly changing digital economies is reshaping the global landscape of commerce and consumption. Platforms like Temu and AliExpress are gaining staggering momentum. According to surveys, approximately 58% cited affordability and value as reasons for purchasing Chinese products in the last six months. With significant influence in Korea and worldwide, it is crucial to understand and dissect the dual nature of Chinese e-commerce to make informed consumer decisions.
  Firstly, Chinese e-commerce refers to online transactions conducted in China using innovative platforms like Taobao, Temu, and AliExpress. While these platforms offer advantages such as affordable shipping, the lack of intermediate product verification processes poses arisks of lower product quality and potential counterfeit items.
  Examining the impact of domestic Chinese e-commerce reveals significant disruptions. While Coupang previously dominated, Chinese e-commerce is now entering the competition, with Alibaba and AliExpress establishing logistics centers in Korea. This intrusion affects domestic small and medium-sized enterprises (SMEs), facing challenges such as diminished price competitiveness, intellectual property infringements, revenue decline, product issues, and unfair competition.
The international repercussions of Chinese e-commerce are profound. By 2025, China’s cross-border e-commerce Business-to-Customer (B2C) transactions are expected to reach $500 billion. Platforms like Temu aggressively penetrated the U.S. market, investing $200 billion in advertising on Super Bowl, Instagram, and Facebook. Alibaba, ranking second in the U.S. market, constructed logistics hubs in Belgium. The damages incurred by foreign companies are substantial, with the U.S. witnessing a 7.3% decrease in direct purchases from China and legal battles, such as trademark and patent infringement cases involving companies like Apple and Burberry.
  China has imposed fines exceeding 300 million won on Alibaba for abusing its market dominance and introduced comprehensive e-commerce regulations to address these domestic and international concerns. Additionally, Temu enhanced consumer data encryption and shortened delivery times while implementing programs to address labor exploitation. Overseas regulations have also been enforced, with the European Union (EU), Taiwan, and Australia taxing value-added services and imposing stricter customs declarations. The U.S. is considering lowering the duty-free threshold and exposing Temu’s labor exploitation through legislation like the Uyghur Forced Labor Prevention Act (UFLPA).
  Domestically, authorities vowed to crack down on illicit practices related to direct purchases and enhance IP protection and domestic certification obligations. Moreover, consumer protection measures, such as hotline services and consumer toolkits, are being introduced following the Fair-Trade Commission guidelines.
  Furthermore, recent the U.S. legislation mandates the separation and divestiture of TikTok from parent companies to prevent potential data breaches and bolster security. In Europe, the passage of the Digital Services Act aims to scrutinize and safeguard consumers from e-commerce entities. These concerted efforts domestically and internationally offer hope for swiftly addressing the challenges posed by Chinese e-commerce.


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