Investing.com– Alibaba (NYSE:) Group Holding will merge its South Korean operations with e-commerce platform E-Mart 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 document. e-commerce (KS:), confirming previous reports from Bloomberg News. Both companies intend to invest further in the partnership, which will take full ownership of Gmarket.
According to Bloomberg, the new company could have a valuation of approximately $4 billion.
Following the news, E-Mart shares rose 5.5% in Seoul, raising the company’s market capitalization to $1.4 billion. Alibaba shares listed in Hong Kong rose 2.6%.
The partnership aims to strengthen competition against key domestic players such as Naver Corp (KS:). and Coupang LLC (NYSE:).
Alibaba is pushing to expand internationally as growth in its main Chinese e-commerce segment slows. In the September quarter, the company’s domestic e-commerce business showed weak performance, although profits from its cloud division and its international businesses, including Lazada and AliExpress, offset to some extent.
The headwinds in the e-commerce space for Alibaba come amid intensifying competition from emerging players such as PDD Holdings Inc DRC (NASDAQ 🙂 and ByteDance. In response, co-founder Eddie Wu, who has been CEO for more than a year, is leading the company toward consolidating its core operations and channeling investments into areas with greater growth potential.
Last week, Alibaba agreed to sell its Intime department store unit to Youngor Fashion Co. for about $1 billion, part of an effort to streamline its business by shedding non-core assets. The e-commerce giant expects to post a loss of 9.3 billion yuan ($1.3 billion) on its original investment in Intime.