AliExpress, the Chinese e-commerce platform, has substantially boosted the capital of its South Korean subsidiary.
According to the distribution industry on April 24, the AliExpress subsidiary in South Korea recently carried out a capital increase worth US$24.2 million. This represents the largest capital injection since the establishment of the legal entity in August last year.
As a result, the subsidiary’s total capital has increased from $2.9 million to $27.1 million.
Typically, companies increase their capital reserves for purposes such as business expansion, improving financial structures, or securing funds for general operations.
Industry analysts suggest that given the substantial amount of capital raised, the move is likely aimed at covering rising operational or marketing costs in the South Korean market as the business scales up, rather than signaling major new investments. However, the possibility of securing preliminary funds for future investments cannot be ruled out.
Last month, Alibaba Group, the parent company of AliExpress, informed the South Korean government of its plan to invest $1.1 billion over the next three years to expand its operations in the country. This includes the construction of an integrated logistics center (fulfillment center) spanning 180,000 square meters.
A representative from AliExpress described the recent capital increase as “a routine business procedure.”
The Ministry of Economy and Finance is scheduled to hold a meeting with industry stakeholders on April 29 at the Government Complex in Seoul to discuss the entry of platforms like AliExpress and Temu into the South Korean market and formulate response strategies.
Participants will include major online shopping malls such as Coupang, Naver, G-Market, SSG.com, 11Street, and Lotte On, as well as representatives from the Korea Online Shopping Association and the Korea Trade Network.
The outcomes of the discussions will be forwarded to the “Comprehensive Countermeasures Task Force for Overseas Direct Purchases” established last month by the ministry.
This story was originally published by Ashley Song, via Korea Bizwire.
