Alibaba and Coupang Intensify E-Commerce Battle with Major Investments in South Korea

Zinger Key Points
  • AliExpress doubled its users in South Korea to 8.58 million by April, investing $1.1 billion in a new logistics center.
  • Coupang reported a $24 million net loss in Q1 due to heavy investments in AI and delivery networks amid rising competition.

Alibaba Group Holding Limited BABA, through its online platform AliExpress, has significantly increased its presence in South Korea, doubling its users to 8.58 million by April, according to Wiseapp.

Alibaba earmarked $1.1 billion for South Korea to build a new logistics center. This expansion comes amid fierce competition from domestic e-retailer Coupang, Inc CPNG, which is aggressively investing in advanced technologies and logistics to maintain its market share, taking a cue from Amazon.Com Inc AMZN.

Coupang reported a net loss of $24 million in the first quarter, its first in seven quarters. This loss was driven by substantial investments in AI-powered robots and a vast network of delivery drivers, the Nikkei Asia reports.

Alibaba’s net income plunged 86% to $453 million in the comparative quarter due to net loss from its investments in publicly traded companies during the quarter. Adjusted net income declined 11% Y/Y to $3.38 billion.

Coupang’s CEO, Kim Bom-suk, highlighted concerns over growing competition from Chinese e-commerce platforms offering low-priced products, such as AliExpress and PDD Holdings Inc PDD Temu.

AliExpress’s strategy includes a $1.1 billion investment in a logistics hub and call center in South Korea, aiming to match Coupang’s quick delivery times.

Domestically, Coupang faces stiff competition from Naver, which holds a 20% market share compared to Coupang’s 22%.

To diversify, Coupang is exploring new opportunities in grocery and food delivery, areas where Chinese rivals struggle.

Price Actions: CPNG shares were trading higher by 0.34% at $23.31 premarket at the last check on Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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