CJ Logistics continues to revolutionize the overseas direct purchase market with its extensive logistics network, strategic partnerships and innovative solutions
The global e-commerce market is expanding at an unprecedented rate. In the past, the focus was on convenient purchasing; however, today, the emphasis has shifted to fast and easy transactions. Accessibility has improved, and entry barriers have been lowered to such an extent that even ordinary individuals can now run their own online stores.
The overseas direct purchase market is evolving in similar ways. Buying products at lower prices from international platforms such as Amazon, eBay, AliExpress and Temu has become a part of daily life. Now, a new trend is emerging: overseas customers purchasing directly from Korea and Korean sellers selling domestic products to international consumers.
CJ Logistics has entered the overseas direct purchase market in response to these changes. In overseas direct purchasing, sellers must manage various aspects, including distribution, logistics, delivery and customs procedures. To mitigate the challenges faced by domestic sellers, CJ Logistics is leveraging its in-house solutions to ensure seamless transactions with international consumers.
What is an Overseas Direct Purchase?
A direct purchase refers to domestic consumers buying products from overseas online platforms. Conversely, an overseas direct purchase involves overseas consumers purchasing products from domestic online stores.
As the global trend toward online interactions accelerated during the COVID-19 pandemic, overseas direct purchases surged. The rapid expansion of K-culture among Generation Z has driven a substantial increase in Korean cultural content, like food and more, driving a notable increase in online consumption of related products. Additionally, the establishment of a platform environment that enables anyone to participate in online sales has further propelled the overseas direct purchase boom.
This trend is particularly evident in markets with high purchasing power, such as Singapore and Indonesia, where a stable overseas direct purchase market has emerged. The logistics sector, driven by fandom culture, such as K-pop merchandise and albums, is also expected to accelerate in the coming years. Consequently, the logistics network built by CJ Logistics in collaboration with local overseas delivery partners is poised to play a key role in facilitating the overseas direct purchase business.
Save Costs, Easy Process: Logistics is the Key to Overseas Direct Purchase
Up until last year, large e-commerce companies dominated the overseas direct purchase market. This dominance stemmed from their capacity to oversee a diverse portfolio of brands and products, combined with integrated logistics systems that facilitated seamless entry into international markets.
Recognizing this opportunity, logistics companies have now become the central players in this market. Last year in April, CJ Logistics, a global supply chain management (SCM) solution provider, partnered with Singapore-based logistics giant Ninja Van to tap into the Southeast Asian market, where overseas direct purchasing is most active.
Ninja Van is a leading logistics provider in Southeast Asia, offering customs clearance and delivery services across six countries: Singapore, Malaysia, Indonesia, Vietnam, the Philippines and Thailand. Together, CJ Logistics and Ninja Van will drive innovation and enhance delivery operations through cutting-edge digital technologies, including a real-time tracking system.
As a result of the partnership between the two companies, a comprehensive Southeast Asia overseas direct purchase network has been created. Southeast Asian customers using CJ Logistics’ services no longer need to directly engage with domestic or international customs brokers and transportation companies. A seamless, one-stop logistics solution now connects the entire delivery process, from Korea to the final consumers in Southeast Asia.
In addition to shortening the delivery process, logistics costs are expected to be significantly lower than those of overseas direct purchases using traditional international express services, thanks to the economies of scale achieved by global logistics companies.
A Global Network for Overseas Direct Purchases
Building on this approach, CJ Logistics is expanding its global overseas direct purchase network. In May, the company announced plans to build an overseas direct purchase logistics network that integrates export customs clearance, forwarding and local delivery, in collaboration with leading logistics companies in the U.S. and Japan. By combining CJ Logistics’ unmatched capabilities with the reliable delivery networks of local partners, the company aims to enhance its competitive edge in the cross-border e-commerce (CBE) sector.
CJ Logistics’ U.S. shipping partners include several major logistics companies, such as FedEx. When users ship items to cities like Los Angeles and New York via CJ Logistics’ air forwarding services, a local logistics company with a substantial delivery network will handle the last-mile delivery. In Japan, a top-tier local delivery company will also ensure the timely delivery of overseas direct purchase products to the final customer.
According to the Korea Customs Service, the total number of overseas direct purchase transactions, where overseas consumers buy products from domestic online shopping malls, reached approximately 49.12 million in 2023. This represents a five-fold increase from 9.62 million in 2018. The transaction amount also surged, rising more than sixfold from 380 million USD in 2018 to 2.3 billion USD in 2023. Both the volume and value of transactions saw significant growth between 2019 and 2021, during the COVID-19 pandemic.
By country, as of the first half of 2023, Japan accounted for the largest share of transaction value, at 33.8% of the total, followed by the United States at 26.6% and China at 14.9%. Notably, the transaction amount in the United States increased by 70.3% compared to the same period the previous year, while Japan saw a 19.9% increase. This growth appears to reflect the rising global popularity of Korean culture, especially in K-beauty.
CJ Logistics aims to enhance logistics services for e-commerce consumers and sellers, with a focus on overseas markets experiencing high demand for direct purchases. The company plans to expand collaboration with local logistics partners and lead the cross-border logistics market, including overseas direct purchases, by leveraging its extensive global network, infrastructure and forwarding capabilities.
