Alibaba enlisted to help exportsTo ramp up exports of consumer goods to China, the government plans to cooperate with Alibaba, the largest online market in China, Finance Minister Choi Kyung-hwan said yesterday at a meeting on overseas economic affairs.
“As the Chinese market is rapidly expanding and consumption patterns of the Chinese people become more diversified, there are new opportunities for neighboring countries,” Choi said. “The government will help local companies make inroads into the market.”
The minister expressed his concern about falling exports to China.
“Although China is the largest export market for Korea, recent drops in the export volume to the market might have adverse effects on the country’s overall exports in the future,” the minister said.
According to data from the Korea Customs Service, total exports to China for the first seven months of this year were $81.4 billion, down from $145.8 billion for all of 2013.
Korean companies are faced with increasing competition from Chinese rivals, Choi added.
The minister said the government will support exports of consumer goods to China.
About 96 percent of Korean exports to China are intermediate goods that are less profitable than consumer goods, according to the Ministry of Strategy and Finance. Consumer goods claim a share of about 3 percent. The ministry aims to double exports of consumer goods to 6 percent by 2020.
The government will link Kmall24, operated by the Korea International Trade Association, with Alibaba’s Tmall, where international businesses are allowed to sell their products. The government hopes the move will help small Korean manufacturers sell their products online.
Under the plan, Korean-made products being sold on Kmall24 will automatically appear on the Chinese website. The ministry said this will help Korean manufacturers save the time required to register their products with Chinese authorities.
The government is also planning to send leaders of small businesses and young Koreans who want to do business in China to Alibaba’s headquarters to be trained on how to succeed in the market.
It also decided to seek cooperation with major Chinese retailers like Suning Universal Group, Denis Group and Dongbang CJ, which have distribution channels in China, to increase sales of Korean products in the market.
Small Korean enterprises operating in China will be able to use logistics and after-service channels of Samsung and LG under the government’s plan.
To increase exports of services, the government will create a 200 billion won ($195 million) fund with the Chinese government. The plan aims to help exports of Korea’s high-quality medical, IT and content services.
BY SONG SU-HYUN[email@example.com]