Alibaba Group reportedly plans to invest in a South Korean online retail platform, its first such investment, as it seeks to bolster its position as a leader in global e-commerce while accelerate cross-border digital trade between China and South Korea.

The move shows the growing clout of Chinese e-commerce platforms thanks to their competitiveness, which will help boost cross-border import and export and contribute to regional economic growth, experts said. 

According to the Korean Economic Daily, Alibaba is in talks with Ably Co, the operator of South Korea's No.1 women's clothes app Ably, to invest 100 billion won ($72.4 million) for about a 5-percent stake, aiming to open a way to expand its sales in South Korea and other markets by combining the fashion of Dongdaemun (South Korea's largest fashion wholesale marketplace) with made-in-China products.

The move has been hailed by market vendors.

"Alibaba provides an excellent platform for small Chinese merchants to go global. It drives trade circulation as well as promotes high-quality Chinese products internationally that will have a promising prospect," Zhao Yun, a Chinese commodity trader, told the Global Times.

Ably's appeal to Alibaba lies in the former's huge attractiveness to female customers in the fashion industry. In March, Ably.com reported over 7 million active female users, much higher than its rivals Musinsa and Zigzag.

Since 2020, Alibaba has tried to venture into the South Korean market. It explored the possibility of acquiring SK Square Co's online shopping platform 11Street last year, but they failed to reach a deal.

In March 2024, Alibaba announced a $1.1 billion investment in South Korea to construct a logistics center spanning 180,000 square meters. Once completed, the delivery time for products sold on Alibaba's international e-commerce platform AliExpress in South Korea would be significantly shortened, further enhancing the platform's competitiveness.

Unlike independent merchants on platforms like Amazon and eBay, China's e-commerce giants — SHEIN, AliExpress, TEMU, and TikTok Shop — utilize a "fully managed" model covering payment, logistics, warehousing, and operations. It streamlines the selling process, allowing sellers to concentrate on product development and production.

In the past years, Chinese products, known for their good quality, affordability, and diverse range, have captured a growing number of Korean consumers, according to Zhang Huizhi, director of the Institute for North Korea and South Korea Studies at the Northeast Asian Research Institute of Jilin University.

E-commerce has become a new driving force in China-South Korea trade, reflecting the changing comparative advantages between the two countries. China's fashion sector is gradually gaining influence in South Korea, Zhang told the Global Times on Tuesday.

According to official data, in 2023, the value of cross-border e-commerce goods from China to South Korea surged to 32.8 trillion won, up by 121.2 percent year-on-year, accounting for 48 percent of South Korea's total cross-border e-commerce import. 

China's Ministry of Commerce data shows that, in 2023, cross-border e-commerce import and export volume reached 2.38 trillion yuan, growing by 15.6 percent year-on-year.

"In the future, Chinese e-commerce companies will not only increase cooperation and investment in South Korea, but may also expand to Southeast Asia and other regions, aided by China's 5G technology and increasingly sophisticated financial and logistics networks," Liu Dingding, an Internet industry analyst, told the Global Times.