Investment website — Alibaba (NYSE:) Holdings Group is set to merge its South Korean operations with E-Mart's e-commerce platform to strengthen its position in the country's competitive online retail landscape.
AliExpress International and Gmarket will form a joint venture, with each company holding a 50% stake, according to an exchange filing by E-Mart (KS:), confirming previous reports by Bloomberg News. The two companies intend to invest further in the partnership that will take full ownership of Gmarket.
According to Bloomberg, the value of the new project could be about $4 billion.
Following this news, E-Mart shares rose 5.5% in Seoul, raising the company's market value to $1.4 billion. Alibaba shares listed in Hong Kong rose 2.6%.
The partnership aims to boost competition against major local players such as Naver Corp (KS:). and Coupang LLC (New York Stock Exchange:).
Alibaba is seeking to expand internationally as growth in its core Chinese e-commerce sector slows. In the September quarter, the company's domestic e-commerce business showed weak performance, although gains from its cloud division and international ventures, including Lazada and AliExpress, offset some.
The headwinds in Alibaba's e-commerce space come amid intense competition from emerging players like PDD Holdings Inc DRC (NASDAQ:) and ByteDance. In response, co-founder Eddie Wu, who has been CEO for more than a year, is steering the company towards strengthening its core operations and directing investments to areas with the highest growth potential.
Last week, Alibaba agreed to sell its department store unit Intime to Youngor Fashion Co. For about $1 billion, as part of an effort to simplify its business by disposing of non-core assets. The e-commerce giant expects to post a loss of 9.3 billion yuan ($1.3 billion) on its original investment in Intime.
