In South Korea, the government is launching a bailout plan for its e-commerce companies. $400 million of public money will be injected into two Korean e-commerce giants that can no longer pay their bills. This remedy is welcome, but does not solve the underlying problem, namely aggressive competition from Chinese companies.
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With our correspondent in Seoul, Celio Fioretti
$152 million is what Tmon and WeMakePrice, the two oldest, are missing companies of business Koreanto pay the bills. For a month now, small traders in the country who resell their products on these platforms have simply not been paid due to lack of cash.
South Korea is one of the countries of e-commerce par excellence. These platforms represent 60 to 70% of the daily purchases of South Koreans. The two companies in difficulty alone have nearly 8.6 million consumers. So when they are on the brink of the abyss, the government comes to their rescue by injecting them soon 400 million dollars of public money.
This sum is substantial, but will not prevent Chinese competitors like AliExpress and Temu from continuing their aggressive strategy with prices much lower than Korean merchants who are struggling to keep up and are gradually losing market share.
South Korean courts recently fined AliExpress $1 million for violating e-commerce rules.
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