Investing.com — Alibaba (NYSE:BABA) Group Holding 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:139480), confirming earlier reports by Bloomberg News. Both firms intend to invest further in the partnership, which will take full ownership of Gmarket.
According to Bloomberg, the new venture could carry a valuation of approximately $4 billion.
Following the news, E-Mart shares rose 5.5% in Seoul, bringing the company’s market capitalization to $1.4 billion. Alibaba’s Hong Kong-listed shares climbed 2.6%.
The partnership aims to bolster competition against key domestic players such as Naver Corp (KS:035420). and Coupang LLC (NYSE:CPNG).
Alibaba is pushing to expand internationally as growth in its core Chinese e-commerce segment slows. In the September quarter, the company’s domestic e-commerce business showed weak performance, though gains from its cloud division and international ventures, including Lazada and AliExpress, provided some offset.
The headwinds in the e-commerce space for Alibaba come amid intensifying competition from emerging players like PDD Holdings Inc DRC (NASDAQ:PDD) and ByteDance In response, co-founder Eddie Wu, who has been CEO for over a year, is steering the company toward consolidating its main operations and channeling investments into areas with the highest growth potential.
Last week, Alibaba agreed to sell its Intime department store unit to Youngor Fashion Co. for around $1 billion, part of an effort to streamline its business by shedding non-core assets. The e-commerce giant expects to record a 9.3 billion yuan ($1.3 billion) loss on its original investment in Intime.
