November 23, 2024

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(123rf)

Chinese e-commerce platform AliExpress is in talks with Dongwon F&B to introduce the Korean food company's products on its platform, increasing engagement with Korean brands to expand its presence here.

According to industry sources on Wednesday, the Chinese company has been in contact with several food businesses here, including Dongwon F&B, the South Korean food company renowned for its canned tuna products.

"At present, Dongwon F&B and AliExpress are in preliminary discussions regarding the potential sales of Dongwon’s products," said an official from Dongwon F&B, adding the specific items for sale have not yet been determined.

Due to the absence of a logistics center in South Korea, AliExpress has faced challenges in introducing products from Korean food sellers on its platform. As a result, food items available on the Chinese platform have mostly comprised beverage products, such as bottled water and canned soda.

Last year, AliExpress announced a plan to build a logistics center in South Korea, but no specific plans have yet been disclosed.

Instead, the Chinese company has been enticing Korean companies by offering free access to its platform. Additionally, it posted a job listing on LinkedIn to recruit a fresh food manager responsible for managing partnerships within the food industry in South Korea.

Meanwhile, some local food businesses are taking cautious steps regarding AliExpress, citing concerns over the platform's reputation for low quality.

"When a food company encounters a safety issue, it's catastrophic," said an official from one of the Korean food companies. "It's hard to overlook AliExpress' reputation for being 'cheap but low quality.'"

The official from Dongwon F&B said that they view the Chinese platform as simply another outlet for selling their products.

"Even if Dongwon F&B starts to sell food products on AliExpress, it doesn't mean Dongwon outsources the production process to the Chinese company,” the official said. “So, we believe we don't need to be concerned about AliExpress' reputation for quality."

In the meantime, Lee Young-ae, a professor of consumer science at Incheon University, said that AliExpress still needs to address its product quality issues before expanding into food items.

“While selling food items is undoubtedly essential for building customer loyalty, AliExpress must consider the potential switching costs for customers to transition to their platform," Lee said.

"If they cannot ensure consistent quality across all its offerings, consumers are unlikely to choose AliExpress over local competitors like Coupang."

By Hwang Joo-young (flylikekite@heraldcorp.com)