Chinese e-commerce giant Alibaba Express announced a consumer protection policy on March 14 that offers unconditional returns and refunds within 90 days for cross-border online purchases. Additionally, it has officially launched a customer service hotline and plans to invest about 1.5 trillion won over the next three years.
Alibaba has committed to allowing customers to return products or receive a 100% refund within 90 days of payment completion for overseas direct purchases without needing to provide any proof. This policy applies to cases where products are suspected of being counterfeit or when the ordered products are lost or damaged.
The company has also introduced a refund compensation for “delivery promise” products. Products promised to be delivered within “5 days” or “7 days” are eligible for a 100% refund if not delivered within 14 days from the dispatch date, while other delivery promise products are eligible if not delivered within 30 days. Additionally, customers can claim a coupon worth 1,300 won per order if the delivery promise period is exceeded.
Alongside this, Alibaba, the parent company of Ali, is reported to have submitted a business plan to the government today, proposing an investment of US$1.1 billion over the next three years to expand its business in Korea. This move appears to be a response to the Korean government’s announcement, led by the Fair Trade Commission, of consumer protection measures for overseas online platforms and a strict enforcement of domestic laws such as the Electronic Commerce Act.
Alibaba plans to invest US$200 million to build an integrated logistics center of 180,000 square meters within the country by the end of the year. Although smaller than Coupang’s largest domestic fulfillment center (FC) in Daegu, which covers 330,000 square meters, it would still be among the largest in Korea if completed as planned. However, specific details regarding the location and establishment plans for Alibaba’s logistics center have not been disclosed.
The establishment of the logistics center is expected to shorten the delivery times for Alibaba’s logistics. Currently, it takes at least five days for consumers to receive products from China via sea shipment and customs clearance. Having a logistics center in Korea would reduce this time frame.
However, there is concern within the industry that Alibaba’s investment could start a “chicken game.” While this investment plan alone may not immediately enable Alibaba to match the delivery competitiveness of Coupang, Korea’s leading e-commerce company, Alibaba’s substantial financial resources suggest the potential for further investment. Coupang has invested over 6 trillion won over the past 10 years to establish more than 100 logistics infrastructures in Korea. Industry insiders believe that if Alibaba continues to invest heavily in building its logistics network as part of a long-term strategy, it could pose a significant threat, potentially affecting not only major e-commerce companies but also offline retailers like E-Mart, Shinsegae, and Lotte.
In its business plan, Alibaba also included the establishment of a customer service center and support for Korean sellers through overseas sales. The company plans to invest US$100 million to create a new global sales channel for exporting Korean products abroad, supporting the global market entry of 50,000 Korean small and medium-sized enterprises (SMEs) over three years. Alibaba aims to leverage its e-commerce platform Lazada in Southeast Asia to sell Korean products overseas. Additionally, Alibaba plans to invest 100 billion won to establish a customer service center staffed by 300 professional consultants.
Meanwhile, Alibaba is becoming a talent black hole in the distribution industry by increasing its recruitment of personnel from domestic competitors. The company is particularly focusing on hiring experts in the fashion sector, aiming to boost its market share by bringing local brands into the fashion section it operates.