SEOUL (Reuters) -South Korea’s government signed an agreement on Monday with Alibaba’s AliExpress and PDD Holdings’ Temu to promote product safety, the Korea Fair Trade Commission (KFTC) said.
The agreement comes after heightened regulatory scrutiny of AliExpress, Temu and other Chinese e-commerce platforms as they significantly expand their user base in South Korea.
“Recently conducted safety inspections on products such as those for children sold on the AliExpress and Temu platforms detected a large amount of substances harmful to the human body, seriously threatening consumer safety” and making the agreement necessary, trade watchdog KFTC said.
“We understand that many (regulators) are paying close attention to consumer safety related to overseas online platforms,” Qin Sun, co-founder of Temu, told reporters at the signing ceremony on Monday.
“We will continue to strengthen monitoring to block the distribution of harmful products, such as overseas recall products, in Korea.”
Ray Zhang, CEO of AliExpress Korea said the platform had stepped up consumer protection policies since March including a customer hotline without any language barriers and faster returns.
Under the agreement, the government will provide data and check whether harmful products have been blocked from sale by the platforms. The KFTC said it is also separately pursuing the passing of a Consumer Safety Act that will assign legally binding responsibility to platforms.
It is the first time Temu has signed such a voluntary agreement anywhere in the world, the KFTC said, although AliExpress has a history of signing such agreements with the European Union and Australia.
South Korea’s e-commerce market punches far above its weight as the fourth-largest in the world according to Euromonitor data, only behind China, the United States and the United Kingdom and bigger than Japan’s market, despite having only the 29th largest population in the world.
The number of AliExpress and Temu users in South Korea has ballooned to 8.87 million and 8.29 million, respectively, as of March 2024, ahead of domestic shopping platforms such as 11st’s 7.4 million users, according to the KFTC.
The growth rate is especially fast for Temu, which entered the South Korean market in July last year.
South Korean e-commerce purchases from overseas have jumped 27% to 6.8 trillion won ($4.97 billion) in 2023 from 5.3 trillion won in 2022, according to Statistics Korea.
($1 = 1,368.5200 won)
(Reporting by Joyce Lee;Editing by Ed Davies and Emelia Sithole-Matarise)
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