Amidst increasing competition in South Korea’s bustling e-commerce market, E-Mart and Alibaba are set to join forces to amplify Gmarket’s reach and services.
E-Mart, a South Korean discount chain under the Shinsegae conglomerate, has announced a strategic joint venture with Alibaba, the renowned Chinese e-commerce giant. This collaboration aims to marry E-Mart’s domestic distribution skills with Alibaba’s technological prowess to expand Gmarket’s sales both domestically and globally. The partnership is anticipated to provide mutual advantages by facilitating a larger platform for Korean sellers to distribute their products worldwide.
The joint venture, named Grand Opus Holding, is scheduled to launch in 2025, marking a significant milestone for both E-Mart and Alibaba. This new entity will be jointly owned by E-Mart’s subsidiary Apollo Korea and Alibaba’s AliExpress International, each holding equal shares. As part of this initiative, efforts will be concentrated on enhancing Gmarket’s services to elevate customer experience, thereby marking a strategic expansion for the platform that had earlier reported substantial revenue albeit at a loss.
The announcement of this venture has positively impacted E-Mart’s market performance, with shares rising by 5.45%, reflecting a market capitalization of approximately 2.1 trillion won. The decision is particularly noteworthy as it comes on the heels of E-Mart’s acquisition of eBay’s South Korean business for $3 billion in 2021, which included Gmarket. This acquisition was aimed at bolstering the company’s presence in the competitive e-commerce landscape, where it faces stiff competition from other major players such as Coupang and AliExpress.
Last year, Gmarket generated 1.2 trillion won in revenue, yet faced a loss of 11 billion won. The driving force behind the platform’s current direction, CEO Danny Chung, who joined Gmarket from Alibaba where he served as Korea’s general manager, is poised to bring invaluable insights to the venture. This collaboration is reflective of a broader trend of consolidation and strategic alliances within the industry aimed at leveraging collective strengths to navigate the complexities of modern e-commerce.
Chung Yong-jin, who was recently promoted to chairman of Shinsegae, plays a pivotal role in steering the conglomerate toward new growth avenues. His leadership, coupled with strong family ties to business dynasties entrenched in Korean history, notably with his mother being the daughter of Samsung’s founder, adds a layer of historical and economic significance to these business maneuvers.
The joint venture between E-Mart and Alibaba signifies a promising advancement for Gmarket, aiming to harness combined strengths to navigate the competitive e-commerce market. With strategic leadership and a clear vision, this partnership is set to capitalize on market opportunities both locally and globally, marking a robust step forward for both companies.
Source: Forbes
