Retail in Asia

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Alibaba to invest USD 1.1 billion in South Korea to take on Coupang

Alibaba Group is set to invest USD 1.1 billion over the next three years to create a logistics network in South Korea, as it looks to take on local e-commerce giant Coupang by leveraging low prices and speedy deliveries.

SEE ALSO: Alibaba invests another USD 630 million in Southeast Asia market via Lazada

The Chinese e-commerce giant will spend USD 200 million in 2024 on building a logistics centre on a 180,000-square-meter lot in the greater Seoul region, and is investing USD 100 million to help small and mid-sized South Korean firms sell their products overseas, according to South Korea’s Yonhap News Agency.

A call centre with 300 employees also will be formed, as well as a purchasing department to sell local products overseas.

The company is also expanding its product lineup by offering favourable conditions to businesses that join its platform, the report added.

Alibaba started its South Korean e-commerce business in 2018 under the name AliExpress.

Its investment in Korea comes several months after the Chinese firm invested a further USD 630 million in its Singapore-based Lazada, as it looks to boost sales in the region and remain competitive against rival TikTok.

Coupang, which has over 100 of its own distribution centers, is South Korea’s leading online shopping market and is seeing sales growth.

For fiscal 2023, total net revenues for Coupan reached USD 24.4 billion, marking an 18 percent year-over-year increase.

In late 2023, the Korean giant said it would acquire the business and assets of online luxury platform Farfetch, a move that positions Coupang — often referred to as the Amazon of South Korea — as a frontrunner in the personal luxury goods industry.