Alibaba.com building on successes with South Korean cosmetics firms to boost SME overseas expansion

Alibaba.com is currently available in more than 190 countries, with over 47m active buyers.

Korean cosmetics trading company BigPie C&T, founded in 1999, is an example of a business that has benefited from the platform. By expanding its export markets to 100 countries, sales have increased more than 80 times in five years.

Alibaba.com intends to help more Korean small and medium-sized enterprises (SMEs) create such success stories.

As part of its recently announced project, China’s Alibaba.com has categorised the export challenges of Korean businesses into four areas, with aims to boost provision of tools and services in each area.

“Alibaba.com sells products in more than 5,900 categories and has an average of more than 400,000 order inquiries per day. Up to July, more than 1,000 Korean companies are registered on the platform, and over 80,000 products have been sold to the target audience. ​

“We will continue to actively support Korean SMEs by providing a variety of training and digital tools to help them showcase their designs, and manufacturing and product capabilities to overseas markets,” ​said Andrew Jeong, Vice President of Alibaba.com.

He explained that despite the high quality of products, many long-running Korean SMEs lack experience in digital advertising, search engine exposure, and product demonstrations in the online space.

“Due to the lack of these capabilities and other problems such as limited manpower, they have difficulties transiting into the digital era.” ​

Through a pilot programme named “Key Success Program (KSP)”, the digital marketing capabilities of each participating firm will be enhanced based on the “level” it belongs to.

At the same time, Alibaba.com will provide customised support services at the fee of a monthly salary for one year for companies that are unable to hire dedicated employees.

This service, known as Shared Growth Program (KSP), is expected to be a cost-effective solution in the early stage of market development.

Persevering as export powerhouse​

The other three areas of challenges identified by Alibaba.com are namely credibility, language, and logistics.

“In the B2B market, trust between companies is very important. In order to highlight the R&D, product ideas and quality advantages of Korean SMEs among competitors worldwide, it is essential to gain the trust of buyers and differentiate themselves from other suppliers via certification from third-party agencies,” ​Jeong explained.

As such, the “Alibaba.com Verified Seller” mark is granted to eligible firms, which serves as a measure of product safety and helps buyers transact with confidence.

Language barriers could hold back SMEs from exporting to advanced countries or emerging markets, resulting in delayed or slow business growth. This can be overcome by Alibaba.com’s real-time translators and video-conferencing tools in 16 languages.

When it comes to logistics support, the e-commerce giant helps connect the Korean SMEs with local logistics companies to fulfil shipping via the “most cost-effective” network.

“Currently, we provide logistics services through partner companies in Korea, but we plan to build our own logistics system in the country as soon as possible to add convenience to global trade activities.​

“We plan to help more small and medium-sized businesses advance overseas so that Korea, an export powerhouse in the industrialisation era, can maintain its position in the digital trading era.”​