Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Local retailers want antitrust agency to take further measures against AliExpress, Temu
Fair Trade Commission Chairman Han Ki-jeong, right, enters a meeting for economy-related ministers at Government Complex Seoul, Wednesday. Finance Minister and Deputy Prime Minister Choi Sang-mok, left, is also seen in the photo. Yonhap
By Lee Min-hyung
Korea’s retailers are still casting doubts over the effectiveness of the antitrust agency's planned regulation of Chinese e-commerce firms — such as AliExpress and Temu — as their focus seems to be mostly on protecting customers rather than creating a level playing field in the local retail market, according to industry officials, Thursday.
The reaction came in response to a package of regulations – announced by the Fair Trade Commission (FTC) and relevant authorities – the gist of which was aimed at introducing a mandatory system for foreign retailers to assign their authorized agents here.
But the move still leaves much to be desired, as the regulatory measures lack any other details on how to guarantee fair competition between the foreign firms and their Korean counterparts, according to officials from local retail firms.
For instance, there is no obligation for any products — distributed via Chinese e-commerce firms – to obtain safety certification, such as KC Safety Certification, before selling their products here. However, items sold by local retailers are required to receive the certification.
The regulatory package did not include such details, which sparked concerns over reverse discrimination against domestic e-commerce firms.
An official from a local retail firm said this is why local firms may end up losing their price competitiveness against their Chinese counterparts.
“Almost all of Korea’s major retailers have had to spend more operational costs, in their bid to abide by local regulations,” the official said. “The operational structure pushes them to spend more, thereby increasing the end price. But Chinese retailers skip the process, so they can sell products or foods at such a super-cheap price, which is unfair from the perspective of Korean retailers.”
Another official from a platform firm here also cast doubt on how Korea's watchdogs can keep a close track of any illegalities conducted by foreign firms, as their headquarters are located abroad.
“For instance, the government has yet to receive exact data on the annual sales of Google Korea and a group of other Big Tech firms,” the official said. “There stands ample possibility that Chinese e-commerce firms will also follow suit and not report revenue, to evade taxes.”
But Korean e-commerce firms – most of which are listed on the nation’s local markets – must report their earnings results much more transparently than their foreign rivals, according to the official.
Experts also urged the government to take additional regulatory steps on overseas firms for any retailers doing business here to engage in competition on an equal footing.
“The government and relevant authorities should focus more on building a level playing field by introducing further regulatory steps against foreign firms, as domestic firms fall continuous victim to the rapid inroads, particularly from Chinese e-commerce players,” Kim Dae-jong, a professor of business administration at Sejong University, said.