Alibaba merges South Korean ops with E-Mart

Bloomberg

Alibaba (9988) agreed to merge its South Korean operations with E-Mart's e-commerce platform in a deal of about US$4 billion (HK$31.2 billion) to better compete in the country's fast-paced online retail sector.

AliExpress International and Gmarket are creating a 50-50 joint venture, according to a stock exchange filing by E-Mart.

The companies plan to make further investments in the JV, which will own 100 percent of Gmarket.

The new entity could be valued at about US$4 billion, people familiar with the matter told Bloomberg.

E-Mart shares rose 5.5 percent in Seoul, giving the company a market value of US$1.4 billion.

Alibaba's Hong Kong-listed stock has gained around 11 percent this year, valuing the firm at more than US$200 billion.

The deal would help the companies face off against local rivals including Naver Corp and Coupang.

This month, South Korea's consumer confidence dropped by the most since the outbreak of Covid-19, battered by the political turmoil triggered by President Yoon Suk Yeol's declaration of martial law and his impeachment.

Alibaba has been seeking to expand its international footprint to make up for slower growth in its core Chinese e-commerce business.

The internet pioneer's domestic e-commerce operations reported anemic growth in the September quarter, dragging down financial results that benefited from progress in its cloud division and international business, which encompasses Lazada and the Temu-like AliExpress.