What: Shinsegae plans to form a joint venture with Alibaba International in 2025, combining Gmarket and AliExpress Korea operations while maintaining independent platform operations, amid increasing competition in South Korea's e-commerce market.

Why it is important: This strategic alliance highlights the intensifying competition in South Korea's e-commerce sector, where traditional retailers are seeking partnerships to counter the growing dominance of both domestic and Chinese digital platforms.

E-Mart, Shinsegae's affiliate, will contribute its 100% stake in Gmarket to form a joint venture with Alibaba International, set to launch in 2025. While both Gmarket and AliExpress Korea will be incorporated into the new entity, they will maintain operational independence. This move comes as South Korea's e-commerce market, the world's fourth-largest according to Euromonitor, faces increasing competitive pressures. Gmarket has been struggling to compete against local giants Coupang and Naver, while also facing growing challenges from Chinese platforms like AliExpress and Temu. The partnership emerges at a time when Alibaba Group has experienced challenges in its home market, missing quarterly sales estimates due to reduced consumer spending in China amid economic uncertainties.

IADS Notes: While struggling against competitors like Coupang and Chinese platforms, this partnership comes amid Shinsegae's strategic restructuring, separating its department store and E-mart operations to enhance competitiveness in different retail segments.

Shinsegae to set up joint venture with Alibaba International