According to a stock exchange announcement from E-Mart, AliExpress International and Gmarket will form a 50-50 joint venture, confirming a report from Bloomberg News. The companies intend to invest further in the joint venture, which will fully own Gmarket.
Sources familiar with the situation indicated to Bloomberg that the new entity could be valued at approximately $4 billion, although they requested anonymity due to the confidential nature of the information.
Following the announcement, E-Mart's shares increased by 5.5% in Seoul, resulting in a market capitalization of $1.4 billion. Meanwhile, Alibaba’s stock, listed in Hong Kong, has appreciated by around 11% this year, bringing the company's valuation to over $200 billion.
This merger is expected to bolster the companies' ability to compete against local players such as Naver Corp. and Coupang Inc. Notably, South Korea's consumer confidence has recently declined significantly, the largest drop since the onset of the Covid-19 pandemic, largely due to the political instability following President Yoon Suk Yeol’s declaration of martial law and subsequent impeachment.
Alibaba is actively pursuing international expansion to offset the slower growth experienced in its primary Chinese e-commerce sector. The company’s domestic e-commerce operations reported minimal growth in the September quarter, which negatively impacted overall financial results, despite improvements in its cloud division and international ventures, including Lazada and AliExpress.
Once a leading force in China's e-commerce landscape, Alibaba is now facing challenges in maintaining growth due to increasing competition from emerging rivals such as PDD Holdings Inc. and ByteDance Ltd. This competitive pressure has necessitated a strategic shift under the leadership of co-founder Eddie Wu, who has been serving as CEO for over a year, focusing on consolidating core businesses and directing investments toward the most promising growth opportunities.
Alibaba is currently consolidating its domestic and international e-commerce operations under the guidance of Jiang Fan, while progressively divesting from non-essential holdings.
Recently, Alibaba reached an agreement to sell its Intime department store division to Youngor Fashion Co. for approximately $1 billion, as part of its strategy to divest non-core assets. This transaction will result in the Chinese e-commerce leader incurring a loss of 9.3 billion yuan ($1.3 billion) on its original investment in Intime.
E-Mart's expansion into e-commerce has leveraged both organic growth and strategic acquisitions. The 2021 acquisition of a controlling stake in eBay Inc.'s South Korean online marketplace, a transaction valued at approximately $3 billion, significantly expanded the company's customer base across grocery and general merchandise sectors.