※ URL(Korean): https://www.kisdi.re.kr/bbs/view.do?bbsSn=114679&key=m2101113055776&pageIndex=3&sc=&sw=

KISDI Publishes Report on “Global Expansion of Chinese Distribution Platforms and Policy Responses” 
– Analysis of the impact of Chinese distribution platforms’ global expansion on domestic industries and proposed response strategies 

The Korea Information Society Development Institute (KISDI, President Sangkyu Rhee) has recently released its Basic Research Report (25-03) titled “Global Expansion of Chinese Distribution Platforms and Policy Responses.”

The report provides an in-depth analysis of the rapid global spread of Chinese distribution platforms and their ripple effects across various industries. Platforms such as AliExpress, Temu, and Shein are expanding their presence in global markets through vertically integrated models that encompass manufacturing, logistics, sales, and delivery—far beyond simple e-commerce channels. Korea, too, is not exempt from their growing influence.

The report notes that the growing penetration of Chinese platforms could bring about extensive structural changes across Korea’s logistics, distribution, manufacturing, and platform ecosystems.

In the logistics sector, for example, AliExpress is building large-scale fulfillment centers in Korea, establishing its own logistics network. This development could significantly erode the market share of existing domestic logistics companies.  If Chinese platforms gain dominance over logistics operations, Korean infrastructure could become subordinate to or dependent on foreign platforms.

The distribution industry is also expected to face major challenges. A flood of ultra-low-cost Chinese products entering Korea by leveraging the small-package duty exemption threshold is likely to push domestic small and medium-sized distributors out of the market due to price competition. As a result, traditional distribution networks may collapse, and direct-to-consumer transactions that bypass intermediaries could become the norm, fundamentally reshaping the entire distribution structure.

In manufacturing, domestic small and medium-sized enterprises (SMEs) are projected to suffer the most. Particularly in key consumer goods sectors such as apparel, household items, and small appliances, it will be difficult for Korean manufacturers to match the rapid product turnover and overwhelming price competitiveness of Chinese platforms. This could threaten the survival of domestic producers and, in the long term, lead to industrial hollowing-out.

Lastly, the expanding influence of Chinese platforms across the broader platform ecosystem is also a growing concern. Chinese platforms, leveraging user convenience and aggressive marketing strategies, are rapidly transforming Korean consumer behavior. In contrast, Korean platforms face relative disadvantages in technology, logistics efficiency, and user experience. Moreover, complex issues are emerging regarding platform accountability and fairness, including personal data protection, algorithm transparency, and fake review practices.

The report emphasizes that these developments could have long-term structural impacts that go beyond short-term price competition. It calls for comprehensive and proactive policy design rather than fragmented regulation. Key policy recommendations include revising the small-package duty exemption threshold, strengthening personal data protection, expanding support for small and medium-sized manufacturers and distributors, and establishing a robust regulatory framework for platform governance.