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.
AliExpress and Temu face stricter scrutiny, must appoint local agents
A promotional image of AliExpress / Screen capture from AliExpress' homepage
By Lee Min-hyung
Authorized agents mandated to ensure customer protection
AliExpress and Temu will soon need to designate authorized agents in Korea, as the nation's antitrust authority plans to amend regulations to hold overseas e-commerce platforms more accountable for their inadequate customer protection practices.
According to the Fair Trade Commission (FTC), Monday, the revision to the local e-commerce act passed a Cabinet meeting. After receiving approval from President Yoon Suk Yeol, the revision will be submitted to the National Assembly by the end of August, it added.
The revision boils down to mandating foreign e-commerce platforms to appoint local agents. The move came amid a burgeoning presence here particularly from major Chinese e-commerce players.
They have posed an ever-growing threat to domestic e-commerce firms by rapidly expanding their market share here for the past year. However, they faced criticism for failing to take genuine steps to protect customers.
The Chinese e-commerce firms have faced significant criticism for repeatedly selling hazardous or illegal products on their platforms, with many critics pointing to legal loopholes as the cause.
The FTC expects that requiring foreign platform companies to designate authorized local agents will help reduce unfair and improper sales practices.
The absence of local agents has made it difficult for customers to file complaints when using the services of foreign platform firms. Under the revision, overseas platform operators will have to notify the point of contact for their agents on their platforms.
According to the FTC, if the designated agents fail to address customer complaints, the platforms will be deemed in violation of the law and will be required to correct their practices and face fines.
“Consumers continue to encounter damages amid the rising transaction volume from foreign e-commerce platforms, as they are far from fulfilling responsibility to protect customers,” an FTC official said.
According to data from market tracker Wiseapp Retail Goods, the number of monthly active users for AliExpress reached 8.47 million in July, up 1.2 percent from the previous month. This is the second-largest figure after that of Coupang, a local company here.