The rising popularity of Chinese e-commerce giants AliExpress, Temu and Shein are putting South Korean shopping apps in a tight spot. Shopping apps such as ZigZag and Brandi, which heavily rely on Dongdaemun market sellers that import clothing from China, are experiencing a sharp decline in users.
ZigZag, the third-largest fashion platform in Korea owned by Kakao Style, saw its monthly active users (MAUs) fall by 32.6% to 2.51 million in February, down from 3.73 million a year ago, according to app analytics platform Mobile Index on April 4. Brandi’s MAU dropped to 520,000 in February, a 43% decline in a year.
Ably is the only fashion platform that expanded its user base to over 8 million in February, up 21.4% from the previous year. But user growth rate has stalled compared to the previous year.
Sellers on these platforms are also going out of business. According to the Ministry of the Interior and Safety, 78,580 of these sellers shut down business last year, a 37% increase from 2022.
The sector’s downturn coincides with the growth of Chinese e-commerce platforms in Korea. AliExpress was Korea’s second most used shopping app with 8.18 million users as of February, surpassing local e-commerce app 11th Street with 7.36 million users. Temu ranked fourth place with 5.81 million users. Shein, China’s answer to fast fashion, has yet to launch in Korea.
ZigZag and Brandi have been struggling because they rely on Dongdaemun market sellers that import cheap, trendy clothing from China. Local shopping apps are losing users as Chinese e-commerce giants offer these products at even lower prices. Tips on how to buy the same products sold on Korean fashion apps but at cheaper prices on AliExpress or Temu have been gaining traction online.
Fashion platforms focusing on designer and niche brands such as Musinsa, 29cm and W Concept have been less affected due to their distinct customer base.
AliExpress and Temu have been actively recruiting talent in Korea, including those from Korean fashion apps, to bolster their presence in the apparel sector as part of their ultra-low-price strategy.
“Local fashion apps relying on Dongdaemun sellers will have to diversify their businesses to survive intensifying competition posed by the Chinese e-commerce offensive,” said an industry insider.
