South Korea‘s government and economy are seeing unstable and uncertain conditions after its president declared martial law on Tuesday, which was later rejected by the country’s parliament.
Nonetheless, in the lead up to the chaos and unrest, business went on as usual. Alibaba, likely in an effort to amp up its competitive streak against other e-commerce players in South Korea, has secured a new deal.
The company has invested 100 billion won ($71 million) in Ably Corp., a Korean fast-fashion and e-commerce player, in turn acquiring a 5 percent stake in the business, outlets in Asia reported Monday. Ably has already reached unicorn status, which, in Korea, means boasting a value of over 1 trillion won within 10 years. According to ably, it is now worth over 3 trillion won.
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Ably Corp. operates e-commerce platform Ably, which specializes in women’s apparel; men’s fashion platform 4910 and Japanese e-commerce platform Amood.
The Korea Times reported that Ably’s CEO Seokhoon Kang said that Alibaba’s investment came because it saw the platform’s “business maneuverability and potential.”
An Ably Corp. spokesperson told The Korea Times that Alibaba had an interest in the company’s quick-turnaround times, as well as its prowess in artificial intelligence; according to the spokesperson, the company has been using AI-powered recommender systems since launching the Ably platform in 2018.
“Alibaba has bought our global competitiveness,” the spokesperson said. “Our logistics center in Seoul’s Seongsu area allows us to export fast.”
According to the Korea Times, Ably is seeking further investment from outside Alibaba; reportedly, it seeks 100 billion won from Silicon Valley investors or a sovereign wealth fund.
Rumors of the investment first surfaced in April, when The Korea Economic Daily reported on the potential deal, citing terms very similar to those Alibaba ended up signing. The news comes shortly after South Korean officials found higher-than-legal levels of toxins in products sold via AliExpress. The country’s fair trade commission (FTC) also opened an investigation into AliExpress in May, scrutinizing its terms and conditions to better understand how it handles consumers’ information and privacy.
The company has been expanding its presence in Korea, which could, in part, be a bid at outselling rival Temu, which was also found in violation of Korean toxins laws late last month. Shein, which has been reprimanded by the South Korean government for high levels of chemicals in its products in the past, did not face the same plight as Temu and AliExpress in the most recent round of testing by the Seoul Metropolitan Government. However, its value proposition is not far off from that of Ably, which primarily sells women’s clothing. Alibaba may be trying to get under both of its Chinese-founded e-commerce enemies’ skin with this transaction.
Shein, Temu and AliExpress also have to compete against South Korea-founded Coupang, which also sells low-priced goods in similar categories to Temu and AliExpress. Earlier this year, Yonhap News Agency reported that AliExpress would invest $1.1 billion over three years to set up its own logistics arm in South Korea. An effort requiring such a high volume of spending may indicate a specific interest in competing at a higher level with Coupang, which, according to Yonhap, has the most monthly active users (MAUs) among e-commerce platforms in Korea as of August. AliExpress reportedly had 6.69 million MAUs at that time, putting it in the No. 3 slot, behind Korea’s 11Street Co. AliExpress officials have reportedly said the company will disclose further details about the logistics strategy in the first half of 2025.
Neither Alibaba nor Ably returned Sourcing Journal’s request for comment on the transaction.
