China’s JD.com launches Korean logistics amid market tensions

JD.com, often referred to as China’s Amazon, has launched its first logistics centers in South Korea, marking a significant step in its expansion. The company, which operates as an e-commerce giant in China, opened facilities in Incheon and Icheon, Gyeonggi Province. This is the first time a Chinese e-commerce company has established and directly operated a logistics center in South Korea.

Founded in 1998, JD.com is one of China’s top three e-commerce platforms, alongside AliExpress (Ali) and Temu. While platforms such as AliExpress and Temu operate open-market systems where sellers list products, JD.com distinguishes itself by often purchasing products directly for sale, earning it the nickname "China’s Coupang." In 2022, JD.com’s revenue reached 1.16 trillion yuan (approximately 229 trillion won), more than five times the revenue of South Korea’s Coupang (approximately 41 trillion won). JD.com operates more than 100 logistics centers in 19 countries worldwide.

As JD.com joins the competition, concerns are rising within South Korea’s retail industry. The domestic market has already been significantly impacted by the influx of low-priced Chinese goods. Over the past five years, the number of small-value direct purchases (often from China) has consistently hit record highs. While countries such as the U.S. and Japan have seen a decline in such imports, Chinese direct purchases continue to grow. Last year, South Korea’s direct imports from China were estimated to total 4.77 trillion won, making up 60% of the domestic direct-purchase market.

Experts predict that the presence of Chinese e-commerce platforms in South Korea will intensify. This shift comes as the U.S. has imposed tariffs on small-value Chinese imports, causing Chinese e-commerce platforms to look for new markets. Geographically close and with high purchasing power, South Korea has become a key target for this expansion. South Korea is the world’s fifth-largest e-commerce market, with an annual transaction volume of 242 trillion won.

There is growing concern that JD.com may not only sell Chinese products in South Korea but could also begin distributing South Korean goods to global markets through its platform, similar to what AliExpress is already doing. This would effectively subordinate South Korean manufacturers and consumers to Chinese platforms.

China currently leads the global e-commerce market. According to the international statistics site Statista, China’s B2C (business-to-consumer) online retail sales in 2023 were approximately $2.2 trillion, far surpassing the U.S., which ranked second with $981 billion.

As the influence of Chinese e-commerce platforms like JD.com intensifies, concerns are rising about the potential impact on South Korea’s retail industry, small businesses, and self-employed individuals. To protect domestic industries and consumers from an influx of cheap goods, South Korea must strengthen its competitive edge, develop high-value products, expand new export markets, and revise its duty-free systems. The government must act swiftly to safeguard its economy amid the growing presence of Chinese e-commerce.