Korean companies expand airport facilities to handle barrage of orders from AliExpress

Industry

Published: 07 May. 2024, 19:20

Korean companies expand airport facilities to handle barrage of orders from AliExpress

Hanjin's self-contained control center. [HANJIN]

Korean logistics companies are shelling out millions of dollars to expand their facilities, aiming to cash in on a surge of imports from China's e-commerce platforms including AliExpress.

Hanjin Transportation has invested 10 billion won ($7.4 million) to expand the self-customs clearance facilities at Incheon International Airport’s Global Distribution Center, aiming to double its monthly processing capacity from its original 1.1 million boxes to 2.2 million boxes.

AGV, a robot that moves along QR codse attached to the floor, travels through the CJ Korea Express Smart Fulfillment Center in Gunpo, Gyeonggi. [CJ Logistics]

Hanjin plans to begin operations at the expanded facility by the end of this year. The company is currently in charge of Temu's domestic customs clearance and delivery and partially handles AliExpress's shipments.

CJ Logistics, the country's largest logistics company, plans to expand its facility within Incheon International Airport's cargo terminal area, which is responsible for clearing overseas direct purchase goods. CJ is considering increasing the center's current capacity to as much as 10 million boxes from its current 2 million.

E-commerce goods from China numbered 88.8 million in 2023 an on-year increase of 70.3 percent, according to the Korea Customs Service. Korean purchases from online Chinese platforms increased 121 percent to 3.3 trillion won from 2022.

The operating profits of CJ Logistics and Hanjin Transportation jumped by 16.6 percent and 7 percent, respectively, in the second half of 2023, reflected by a hike in the volume of Chinese direct purchase shipments.

Monthly active users of AliExpress and Temu reached 8.9 million and 8.3 million, respectively, signaling greater growth compared to 2023.

AliExpress plans to invest $1.1 billion in Korea over the next three years. It is scheduled to spend $200 million to build a 180,000-square-meter (1,937,504-square-foot) integrated distribution center in Korea by this year and $100 million to buttress Korean sellers’ exports.

The company will likely use Korea as a base for managing overseas logistics, not to ship products within the country.

When the products are sent to major ports in Korea from AliExpress’ distribution center in China, the newly built Korean facility will forward the goods to Incheon International Airport and disseminate them to North America and Europe.

BY PARK YOUNG-WOO [choi.haejin@joongang.co.kr]