Alibaba Group Holding Ltd. is reportedly nearing a deal to merge its South Korean e-commerce operations with those of E-Mart Inc., a move that could help the Chinese tech giant better compete in the country’s dynamic online retail sector.
According to sources familiar with the discussions, the merger would create a new entity valued at approximately $4 billion, with the final details of the joint-venture deal expected to be announced soon, potentially within the week.
The merger would combine Alibaba’s AliExpress Korea with E-Mart’s existing e-commerce platform, positioning the new company to more effectively take on local competitors like Naver Corp. and Coupang Inc. in the competitive South Korean market. The transaction would come at a time when South Korea’s consumer confidence has dropped significantly, reflecting broader political and economic challenges, including the turmoil caused by President Yoon Suk Yeol’s declaration of martial law.
This potential deal is part of Alibaba’s broader strategy to expand its presence internationally, seeking to offset slower growth in its core Chinese market. Alibaba’s domestic e-commerce business has faced stagnant growth in recent quarters, contributing to weaker-than-expected financial results. In contrast, its international business, including operations in Southeast Asia through Lazada and Europe through AliExpress, has seen more positive growth, helping to support the company’s overall performance.
E-Mart, a major South Korean retailer, has been actively expanding its e-commerce capabilities, both through organic growth and acquisitions. In 2021, the company purchased a controlling stake in eBay Inc.’s South Korean marketplace for approximately $3 billion, further broadening its reach in the online retail space. However, despite these efforts, E-Mart has faced a decline in its stock price, down about 7% this year, with its current market value estimated at $1.4 billion.
Alibaba, on the other hand, has experienced an 11% rise in its Hong Kong-listed shares, pushing its market capitalization to over $200 billion. As both companies continue to finalize the terms of their joint venture, the merger is seen as a strategic move to strengthen their positions in South Korea’s highly competitive and fast-evolving e-commerce market.
While the deal is expected to bring the two companies closer together, E-Mart’s parent company Shinsegae has also been exploring partnerships, planning a separate joint venture with Alibaba International in 2025.
