South Korea – Alibaba Group, a multinational tech firm, has recently teamed up with E-Mart’s e-commerce platform to create a joint venture aimed at strengthening its presence in South Korea’s competitive online retail sector.
In a recent stock exchange filing by E-Mart, Bloomberg News reported that AliExpress International and Gmarket are forming a 50-50 joint venture. This includes both companies’ plans to invest additional funds into the JV, which will have full ownership of Gmarket.
People familiar with the deal also informed Bloomberg that the new entity could be valued at approximately US$4b. Said initiative would enable companies to better compete with local competitors such as Naver Corp. and Coupang.
According to reports, Alibaba has been working to grow its global presence to offset the slower growth in its main Chinese e-commerce business. Its domestic e-commerce operations have also been reported to show poor growth during the September quarter, impacting financial results despite its improvements in cloud division and international operations, including Lazada and AliExpress.
Alibaba is further reportedly struggling to achieve growth, noting its competition with PDD Holdings and ByteDance. Bloomberg also reported that the company has undergone a significant shift in strategy under the leadership of co-founder Eddie Wu, which focused on consolidating its core operations and investing in the most promising growth opportunities.
Meanwhile, under Jiang Fan’s leadership, the company is now optimising its domestic and international e-commerce operations while gradually selling off holdings deemed non-essential.
Last week, Alibaba also finalised an agreement to sell its Intime department store business to Youngor Fashion Co. for about $1 billion, resulting in a 9.3 billion yuan ($1.3 billion) loss on its initial investment in Intime.
Interestingly, reports from Bloomberg further indicate that E-Mart shares increased to 5.5% in Seoul, giving the company a market value of US$1.4b.
E-Mart has also been expanding its e-commerce operations by both organic means and strategic acquisitions.
In 2021, it purchased a controlling interest in eBay Inc.’s South Korean online marketplace for around $3 billion, boosting its reach in categories such as groceries and general merchandise.
On the other hand, Alibaba’s Hong Kong-listed stock has gained around 11% this year, valuing the firm at more than US$200b.
