Alibaba Invests $1.1B in South Korea to Boost Logistics

Alibaba Group Holding Ltd BABA plans to allocate $1.1 billion towards investments in South Korea over the next three years, aiming to establish a logistics center and broaden its business operations. 

Specifically, the Chinese e-commerce behemoth intends to invest $200 million in constructing the logistics center this year, with an additional $100 million earmarked to assist small and mid-sized South Korean companies in marketing their products internationally.

Reuters cites a South Korean news agency Yonhap report, which referenced a business strategy document from the company. 

This investment news comes when South Korea’s data protection authority announced it is investigating the consumer data practices of major international shopping platforms, including Alibaba’s AliExpress, highlighting regulatory scrutiny alongside Alibaba’s expansion efforts in the region.

AliExpress had earlier proposed to invest 100 billion South Korean won ($76.2 million) in South Korea this year to improve logistics as Alibaba aggressively chased growth in international markets.

AliExpress launched three-to-five-day shipping to South Korea in 2021, especially in fashion, from Taobao, Alibaba’s e-commerce site in China. The business unit disbursed 10 billion won in 2022 in South Korea to lower product prices. 

AliExpress’ monthly active users in South Korea have nearly doubled since 2018, reaching 7 million.

Alibaba fintech affiliate Ant Group had promised to assist four Asian e-wallets expanding into South Korea with its cross-border payment service Alipay+, as per a prior report.

Investors can gain exposure to Alibaba via Invesco Golden Dragon China ETF PGJ and Tidal Trust II CoreValues Alpha Greater China Growth ETF CGRO.

Price Action: BABA shares are trading lower by 1.44% at $75.29 on Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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