Alibaba Group Holding Ltd (阿里巴巴) has agreed to merge its South Korean operations with E-Mart Inc’s e-commerce platform to better compete in the nation’s fast-paced online retail sector.
AliExpress International (全球速賣通) and Gmarket are creating a 50-50 joint venture, according to a stock exchange filing by E-Mart, which confirmed a report by Bloomberg News. The companies plan to make further investments in the joint venture, which would own 100 percent of Gmarket.
The new entity could be valued at about US$4 billion, sources familiar with the matter said.
Photo: EPA-EFE
The deal would help the companies face off against local rivals, including Naver Corp and Coupang Inc.
South Korea’s consumer confidence this month dropped by the most since the outbreak of the COVID-19 pandemic, battered by the political turmoil triggered by South Korean President Yoon Suk-yeol’s declaration of martial law and his impeachment.
Alibaba has been seeking to expand its international footprint to make up for slower growth in its core Chinese e-commerce business. The Internet pioneer’s domestic e-commerce operations reported anemic growth in the third quarter, dragging down financial results that benefited from progress in its cloud division and international business, which encompasses Lazada Group and AliExpress.
Once a dominant player in China’s e-commerce field, Alibaba is struggling to grow amid competition from rising rivals such as PDD Holdings Inc (拼多多) and ByteDance Ltd (字節跳動). The company is now integrating its domestic and international e-commerce operations, and has been steadily selling off holdings it does not consider essential.
E-Mart has been expanding its e-commerce business organically and via acquisitions. It in 2021 acquired a controlling stake in eBay Inc’s South Korean online marketplace for about US$3 billion, expanding its customer base.
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