Alibaba to invest US$1.1 billion in South Korea as international operations outperform domestic market

E-commerce giant Alibaba Group Holding plans to invest US$1.1 billion in South Korea over the next three years, according to a local media report, amid a probe by regulators into its consumer protection and data practices.

Alibaba will spend US$200 million this year to build a logistics centre and US$100 million to help small- and medium-sized firms on the peninsula to sell their products overseas, according to Korean media outlet Yonhap News Agency, citing a business strategy document from the Chinese company.

The company will also invest 100 billion won (US$75.7 million) to improve consumer protection, according to the report, at a time when its AliExpress marketplace is being probed by South Korea’s antitrust regulator – the Fair Trade Commission – following a series of customer complaints.

Alibaba, which also owns the Post, did not immediately respond to a request for comment on Friday.

The reported cash injection also comes as the Chinese tech giant and its rivals double down on overseas markets amid sluggish growth at home.

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Chinese merchandise has been gaining traction among Korean shoppers, with online consumption from China last year rising 121 per cent to 3.3 trillion won from a year earlier. This made up nearly half of the country’s total overseas e-commerce purchases, according to a Reuters report citing official data.

However, regulatory scrutiny is rising. The country’s Personal Information Protection Commission said last week it has been investigating overseas e-commerce platforms, such as AliExpress and PDD Holdings’ discount shopping platform Temu, to see if their personal information processing policies, overseas transfers and safety measures have violated South Korean law.

AliExpress, launched in South Korea in 2018, saw its monthly active users surpass 7 million as of last November, nearly doubling from the number recorded a year earlier, according to mobile market research firm WiseApp.