FX168 Financial News (North America) reported that South Korean retail giant Shanghai New World Group's E-Mart announced on Thursday (December 26) that it will join forces with Alibaba to establish a joint venture to further strengthen its competitive position in the South Korean E-Commerce market.
It is reported that the Shanghai New World Group plans to inject its entire stake in the Gmarket E-Commerce platform into the joint venture as part of its investment.
At the same time, Alibaba's Global AliExpress Korea will also be merged into the joint venture. The new joint venture is expected to be officially established in 2025, but the Gmarket and AliExpress Korea platforms will still maintain independent operations.
Why join forces?
This collaboration is seen by industry insiders as a strategic move by the Shanghai New World Group to respond to the increasing competition in the South Korean E-Commerce market.
On one hand, the South Korean E-Commerce market is large, with data from Euromonitor International indicating that South Korea is the fourth largest E-Commerce market globally.
However, Gmarket has long faced strong competition from domestic E-Commerce giants Coupang and Naver, as well as challenges from Chinese E-Commerce platforms such as AliExpress and Temu.
On the other hand, Alibaba Group has also recently faced pressure from the domestic economic environment in China. With a decline in consumer spending, a worsening Real Estate industry crisis, and severe youth employment issues, Alibaba Group's quarterly sales have continuously fallen below market expectations for several quarters.
This cooperation with Shanghai New World is seen as Alibaba Group's strategic layout for expanding its E-Commerce Business globally and seeking new growth points.
Cooperation prospects.
Analysts believe that the partnership between Shanghai New World and Alibaba will have multiple positive impacts. First, both parties can share their SSE Select Resources Industries Index in the E-Commerce field, including supply chain, Logistics, and technology, thereby enhancing the competitiveness of the joint venture.
Second, by integrating the advantages of Gmarket and AliExpress Korea, the new joint venture is expected to occupy a larger share in the South Korean E-Commerce market.
Finally, this cooperation will further promote the collaboration between China and South Korea in the E-Commerce field and facilitate economic and trade exchanges between the two countries.
The collaboration between Shanghai New World and Alibaba will undoubtedly have a profound impact on the E-Commerce market in South Korea and even globally.
As global E-Commerce competition becomes increasingly fierce, cooperation and integration between enterprises will become a future development trend. The success or failure of this collaboration will also provide valuable experience and reference for other E-Commerce companies.
