More than half of small and medium-sized enterprises in manufacturing and distribution lack a response strategy for the expansion of Chinese e-commerce (Ali, Temu, Shein) into the domestic market.
The Korea Federation of Small and Medium Enterprises released the results on the 2nd of a survey of 300 domestic manufacturing and distribution small and medium-sized enterprises conducted last month regarding the expansion of Chinese e-commerce into the domestic market.
According to KBIZ, only 29.7% of small and medium-sized enterprises in manufacturing and distribution are utilizing Chinese e-commerce. Of those, 21.0% expressed a willingness to use it in the future despite having no experience, while 49.3% had no experience or plans.
The methods of utilizing Chinese e-commerce include ▲expanding domestic market share through listing (65.2%) ▲reselling purchased products domestically (11.2%) ▲procurement of raw materials or parts (6.7%).
Regarding response strategies to the expansion of Chinese e-commerce into the domestic market, 63.7% of corporations answered that they have 'no special plans.' This was followed by ▲expanding the use of domestic e-commerce platforms (10.3%) ▲developing differentiated products (9.0%) ▲price reductions (8.7%).
As a top support policy, 34.7% of corporations responded 'strengthening certification for Chinese e-commerce listing companies.' Other suggestions included ▲support for commissions for domestic e-commerce listed companies (32.3%) ▲strengthening customs and quality inspections for overseas direct purchase products (26.3%) ▲enhancing sanctions for intellectual property rights infringement (23.0%).
Choi Woongap, head of the economic policy division at KBIZ, noted, 'Chinese e-commerce represents both a new crisis and an opportunity for small and medium-sized enterprises.' He added, 'Policy support should be expanded, such as by providing logistics cost assistance, to help small and medium-sized enterprises adapt to the new distribution environment.'