South Korea – Alibaba Group Holding Ltd. has partnered with E-Mart Inc. to establish a joint venture, combining their South Korean e-commerce operations in a strategic move to compete more effectively in the country’s growing online retail market.
According to Bloomberg, E-Mart’s stock exchange filing confirmed earlier reports that AliExpress International and Gmarket are forming a 50-50 joint venture. The companies reportedly plan to make additional investments in the venture, which will hold full ownership of Gmarket.
Sources familiar with the situation told Bloomberg that the new entity might be worth about $4 billion.
The joint venture aims to strengthen the companies’ position against local competitors such as Naver Corp. and Coupang Inc. Additionally, Alibaba has reportedly been focusing on expanding its international footprint to offset slower growth in its core Chinese e-commerce operations.
Alibaba’s domestic e-commerce growth remained sluggish in the September quarter, weighing on financial results despite gains in its cloud and international businesses, including Lazada and AliExpress. Facing fierce competition from PDD Holdings and ByteDance, the company has pivoted under CEO Eddie Wu to streamline core operations and prioritise high-growth areas, Bloomberg reported.
Alibaba, under Jiang Fan’s leadership, is integrating its domestic and international e-commerce operations while shedding non-core assets. Last week, the company sold its Intime department store business to Youngor Fashion for $1b, marking a $1.3b loss on its initial investment.
Meanwhile, Bloomberg also reported that E-Mart shares rose 5.5% in Seoul, boosting its market value to $1.4 billion. Alibaba’s American depositary receipts climbed 2.1% in New York, bringing this year’s gains to over 11% and valuing the company at $206 billion.
E-Mart has been expanding its e-commerce presence through organic growth and acquisitions, including a 2021 deal to acquire a controlling stake in eBay’s South Korean marketplace for $3 billion.
