China’s Alibaba Group will invest USD 1.1 billion over the next three years to create a logistics network in South Korea, aiming to take on local e-commerce giant Coupang by leveraging low prices and speedy deliveries.
South Korea’s Yonhap News Agency reported the plans.
Alibaba started its South Korean e-commerce business in 2018 under the name AliExpress. It plans to construct a logistics center this year on a 180,000-square-meter lot. It is currently selecting the site in the greater Seoul region.
A call center with 300 employees also will be formed, as well as a purchasing department to sell local products overseas, aiming to boost exports for 50,000 small South Korean businesses over three years.
CJ CheilJedang, South Korea’s largest food company, began selling products on AliExpress in March. The company had been locked in a fight with Coupang over business terms. Alibaba is expanding its product lineup by offering favorable conditions to businesses that join its platform.
Coupang, which has over 100 of its own distribution centers, leads South Korea’s online shopping market and is seeing sales growth. Tech giant Naver and major retailer Shinsegae Group are in pursuit.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.