The landscape of global trade today has been significantly influenced by increasing uncertainties in trade policies, especially in the United States, which has resulted in a volatile tariff regimeSuch fluctuations pose a considerable amount of risks for cross-border e-commerce businesses, creating an array of operational challenges that were previously unseenAmong the new players in the cross-border e-commerce domain, Temu has emerged, now recognizing the escalating pressure in the marketIn light of potential adjustments to tariff policies that could curb its market share in the United States and lead to revenue instability, Temu has strategically pivoted its focus towards Asia, with South Korea becoming a priority area for expansion.

Temu has formally initiated a local warehouse bidding process within the South Korean market to expedite its localized supply chain infrastructurePresently, South Korea has a mere ten customs clearance sites with limited clearance facilities, further hampered by a continuous reduction in customs personnelConsequently, daily customs clearance abilities have reached their ceilingsIn light of these constraints, Temu's merchants are opting for general trade export methods to transport their goods to South Korea, subsequently utilizing local warehouses for storage and distributionThis represents Temu’s implementation of a “local-to-local” logistics model, crafted to enhance supply chain efficiency while reducing logistical costs.

To further bolster supply chain security and operational efficacy, Temu is set to implement a stringent official certification mechanism for third-party warehouses, ensuring that storage, sorting, and distribution processes are standardized and regulatedIn the competitive South Korean logistics market, domestic giants such as Hanjin and CJ Logistics are highly sought after for their warehouse resourcesAdditionally, Chinese-operated local warehouses have garnered attention due to their localized service prowess and deep understanding of Chinese merchant needs, making them significant focus points for Temu's supply chain strategy

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Notably, Yunda Korea has emerged as a candidate partner for Temu, thanks to its robust capabilities in local storage and logistics distribution.

Even as early as last year, Temu's merchants had started eyeing the commercial opportunities in the South Korean marketHowever, complications related to cross-border fund repatriation posed initial challengesMerchants conceptualized a model where revenues from sales in South Korea could be directly transferred back to their company accounts in China, but this plan failed due to violations of international trade regulations and Korean tax laws.

In pursuit of overcoming these policy obstacles, various outbound enterprises are now opting to establish local companies in South KoreaBy employing localized operational models, they are setting the stage for their entry into the Temu platform in South Korea, marking a new journey of market expansionThis strategic shift not only accelerates Temu's localization efforts in the South Korean market but also gives rise to new demands for industry chain services, such as assisting Chinese enterprises with company registration, tax planning, and compliance operations in South Korea, thus becoming a budding growth point within the cross-border service sector.

The South Korean market holds significant potential, prompting Temu to closely follow in the footsteps of AliExpressLaunching in July 2023, Temu initially zeroed in on the import business before formally establishing a South Korean subsidiary, Whaleco Korea, in February 2024, notably without employing local staffThe looming uncertainty surrounding U.S. tariffs has spurred a commitment from the Temu side to intensify its investment in the South Korean market.

Reports from the Korea Herald indicate that Temu commenced recruiting for core positions such as human resources, administration, marketing, and logistics as early as the end of last year, widely interpreted as preparations for a direct entry into the South Korean market

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Currently, Temu has begun outreach efforts, mandating that participating companies be South Korean entitiesThey will provide professional customer team guidance, product selection advice, and traffic support, with popular items gaining opportunities for additional advertising exposure.

Why is the South Korean market a focal point? This can be analyzed from three perspectives: market scale, market potential, and consumer structureAccording to MobiLoud, the five largest e-commerce markets in 2024 will be China, the United States, the United Kingdom, Japan, and South Korea, with South Korea's e-commerce sales projected to reach $147.4 billion (approximately 1.07 trillion RMB) in 2024, accounting for about 5% of China’s marketGiven South Korea's population of approximately 51.3 million and a Gross National Income (GNI) of about $36,000 (approximately 262,100 RMB), this reflects substantial purchasing power among South Koreans.

Moreover, the growth potential for Temu in the South Korean market is noteworthyData from IGAWorks reveals that from January to November 2024, Temu topped the chart in overall app downloads for all age groups with 18.04 million downloads—nearly three times that of AliExpress during the same periodThe latest statistics indicate that by January 2025, Temu's monthly active users had reached 8.23 million, trailing only behind local e-commerce giants Coupang and AliExpress.

Further data demonstrates that Chinese cross-border e-commerce transactions in South Korea are expected to exceed $2.7 billion (approximately 19.7 billion RMB) in 2024, marking an impressive year-on-year growth of 85%. The overall market share increased from 1.64% at the start of the year to 4.07%, showcasing a rapid growth trendIt's noteworthy that in 2024, the average spend of South Korean users on AliExpress was 88,601 KRW (approximately 447.43 RMB), whereas the spending on Temu was 72,770 KRW (approximately 367.48 RMB), indicating a narrowing gap.

In terms of consumer structure, a report by Statista indicates that over 90% of South Korean users aged 20 to 49 engage in online shopping, with the figure surging to 98% among those aged 20 to 29—indicating a strong reliance on e-commerce among younger consumers

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