When it comes to Chinese Internet services, everyone has their obsessions. In Washington, the hope is to bring down TikTok or at least wrestle it from Beijing’s clutches by having it bought out by American investors. In Paris, MPs are learning to pronounce the words “fast fashion” perhaps not fully grasping its meaning but squarely focusing their attention on the dazzlingly successful Temu shopping site and its more fashion-oriented competitor Shein. As usual, a law accompanied by additional taxes of dubious effectiveness is likely to emerge from their deliberations.
Worrywarts in Washington and Paris should be pleased to note that on the other side of the world, many South Koreans share their concern about the Chinese Internet tidal wave. On Wednesday, March 13, the Minister of Economy and Finance, Choi Sang-mok, presented a package of measures designed to better control the practices of these Internet companies.
Under the measures the big platforms will have to have a physical presence in the country – despite their runaway success, Temu and Shein are not present – and controls will be tightened to avoid the quality and counterfeiting problems now multiplying at great speed.
Total break
Like those in the US and Europe, including France, the measures are supposed to protect consumers even against their own judgment, but they also conceal a more prosaic concern. In just two years, according to the Korea Economic Daily, the major Chinese platforms have destabilized Korea’s powerful e-commerce players, such as Coupang and Naver. American platforms, led by Amazon, saw their market share shrink to 27%, compared to the Chinese market share of 48%.
This global phenomenon raises economic, societal, and political questions. Temu’s model, for example, is hard to pin down and based on very few employees and physical assets. Its business is information technology and marketing. The producers on its platform take care of the rest: manufacturing, warehousing, and shipping. It represents a complete departure from the Amazon and Alibaba models.
The societal issue is addiction to low prices. In the West, environmental and even moral questions are being raised about the harmful effects of over-consumption. And politics is omnipresent. At a time when America is trying to decouple itself from China and draw its allies into this movement, the surprising success of the Chinese e-commerce giants is destabilizing anti-Beijing rhetoric and awakening protectionist reflexes.
