AliExpress, an online direct purchase platform owned by Chinese e-commerce giant Alibaba Group, has revealed plans to invest 10 billion won ($7.6 million) in South Korea over the next three years to extensively regulate counterfeit goods sold on the platform, according to the firm on Wednesday.

The announcement comes amid ongoing consumer complaints about counterfeit goods purchased through the platform since its official debut in Korea in 2018.

"We feel an increased sense of responsibility toward the upsurge in interest from Korean consumers," said Ray Zhang, general manager of AliExpress Korea, during a press conference in Seoul.

"Fortifying intellectual property rights and consumer rights is a crucial focus for our investment. We will employ multiple systems that leverage both AI technology and human inspections."

Jang noted recent proactive measures implemented, in response to criticism received during a parliamentary inspection in October. "In the last two months, we have taken down 977,151 products suspected of infringing intellectual property rights. Additional measures were done to strengthen protection for some 7,550 Korean brands."

In terms of specific methods, Zhang introduced two new measures: "Project Klean," an intellectual property reinforcement program, and "Mystery Shopper," a system for random product inspections regularly.

The primary actions of Project Klean involve enhancing merchant verification and utilizing deep-learning artificial intelligence algorithms to interpret visual and textual cues of fake products. Additionally, if customers call out a purchased product as being counterfeit, a full refund will be issued out without the need to submit evidentiary documents.

The Mystery Shopper initiative consists of a dedicated team of individuals implementing random inspection systems to ensure the protection of Korean brands and consumers.

Meanwhile, concerns have arisen in the country regarding the gradual intrusion of Chinese markets in South Korea through AliExpress. Aside from well-known Korean brands already present on AliExpress through its “K-Venue” section, small and medium-sized enterprises in Korea may struggle to establish a presence on the platform. In response, Zhang stated that over the past years, various businesses within Alibaba Group have been actively supporting both brands and SMEs in South Korea.

"Approximately 7,600 Korean brands are currently operating stores on Taobao and Tmall, attracting over 100 million Chinese consumers annually to purchase Korean goods. Alibaba.com has played a pivotal role in assisting 1,400 Korean SMEs in securing global procurement orders."

Zhang added that AliExpress and Lazada, another international online shopping unit under Alibaba, are poised to facilitate the expansion of South Korean SMEs into markets including Japan, Southeast Asia, Europe and the US.

Regarding shipping, CJ Logistics, South Korea's largest shipping company, currently handles all AliExpress products in the country. This year alone, the transaction volume has more than doubled, increasing from 3.46 million boxes in the first quarter to 9.04 million in the third quarter.

When questioned about potential plans for the Alibaba Group to establish a large-scale logistics center in South Korea, Zhang expressed openness to possibilities at the moment, but clarified that no concrete plans are in place.

He instead emphasized the importance of ensuring customers receive fast and secure delivery with AliExpress. "Our goal is to deliver any product within five working days of the order placement. We have maintained a consistent strategic partnership with CJ Logistics since they are making dedicated efforts to meet our goal. We have received positive feedback from customers regarding the quality of the logistics service they provide."

Meanwhile, Zhang firmly denied recent speculation about a possible acquisition of 11th Street, one of the top open market platforms here. According to market tracker Mobile Index, the number of AliExpress users has nearly doubled this year from 2.27 million in January to 4.31 million as of October.

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