The criticism against Chinese e-commerce companies, which aggressively enter the domestic market with ultra-low prices, is growing due to their disregard for relevant laws while operating within the country. There are numerous complaints about these companies consistently sending advertisements that violate regulations through mobile applications (apps) and being insensitive to issues of personal information breaches.
According to retail industry sources on Feb. 18, Chinese e-commerce giants AliExpress and Temu have recently sent promotional mobile phone text messages, app push notifications, and emails without labeling them as advertisements.
Upon reviewing the content sent by both companies, it is evident that they contain clear promotional messages. However, it is difficult to find clear indications labeling them as advertisements. Additionally, it appears that Temu does not provide smartphone app access permission notifications when installing or running the app.
In the domestic retail sector, there are concerns about the potential transfer of personal information to local Chinese sellers when using Chinese e-commerce platforms like AliExpress or Temu. There is apprehension that such information could be exploited for crimes such as voice phishing or telephone fraud.
Consumers have also been pointing out that these companies are openly selling items on their online shopping platforms that should not be sold, such as counterfeit goods and potentially harmful items like medicines or weapons.
The problem lies in the difficulty of imposing sanctions on these Chinese-owned online shopping malls even when they violate domestic laws.
The “Platform Fair Competition Promotion Act (Platform Act),” which the Fair Trade Commission has been pushing forward to prevent the abuse of dominance by large platform companies, was expected to address such legal loopholes and serve as a new regulatory mechanism. However, its implementation has been indefinitely postponed due to opposition from the industry.
Jeong Ji-yeon, secretary-general of the Consumers Union of Korea (CUK), pointed out, “There is no legal basis to regulate the illegal business activities of overseas e-commerce operators. It is necessary to revise relevant laws to prevent harm and take subsequent measures in case of any damages when these companies operate targeting domestic consumers.”
The number of users of Chinese-run e-commerce platforms who have launched aggressive campaigns with ultra-low prices in the domestic market is experiencing explosive growth.
According to the mobile app analytics service Wiseapp Retail Goods, the number of users on the AliExpress app reached 7,175,000 as of last month, showing a rapid increase of 113 percent compared to January last year when it was 3,364,000 users. Similarly, the number of users on the Temu app surged from 520,000 in August last year to 5,709,000 last month, an increase of over tenfold.
As a result, there has been a sharp increase in consumer complaint reports. The number of consumer complaints related to AliExpress received by the CUK last year reached 465 cases, which is five times higher than the previous year when it was 93 cases. Among these, the most common issues were breaches of contract, including delivery delays, misdeliveries, missing items, and losses during delivery, totaling 226 cases, or 49 percent. There were also 143 cases, accounting for 31 percent of the total, related to refusal of refunds after contract termination, and 82 cases, representing 18 percent of the total, related to quality complaints such as counterfeit products or defective and damaged items.