Shinsegae Group has announced a strategic partnership with China’s Alibaba Group. (Image courtesy of Yonhap)
SEOUL, Dec. 27 (Korea Bizwire) — Shinsegae Group has announced a strategic partnership with China’s Alibaba Group, forming a joint venture to bolster its position in South Korea’s highly competitive e-commerce market.
The new entity, “Grand Opus Holding,” will launch in 2025 with equal ownership between Shinsegae and Alibaba’s international subsidiary. The partnership integrates Shinsegae’s Gmarket platform and Alibaba’s AliExpress Korea, while maintaining their independent operations.
Shinsegae views the partnership as a transformative step to create synergy through global collaboration. The group aims to leverage Alibaba’s vast international network to extend its reach, enabling Gmarket’s 600,000 sellers to access markets in China, the United States, Europe, Southeast Asia, and beyond. System upgrades will facilitate smoother entry for sellers into Alibaba’s global platforms.
The move comes after Shinsegae’s $2.4 billion acquisition of an 80.01% stake in Gmarket from eBay in 2021, marking an ambitious attempt to strengthen its digital footprint. However, Gmarket’s financial performance has faltered, reporting cumulative losses of approximately $100 million over 2023 and 2024.
This prompted cost-cutting measures, leadership changes, and the appointment of former Alibaba Korea executive Jeong Hyeong-gwon as CEO of Gmarket earlier this year.
Industry analysts believe Jeong’s appointment was a precursor to the Alibaba partnership. Facing fierce competition from Coupang and Naver, which dominate South Korea’s online retail space, Shinsegae aims to challenge the status quo by combining its robust offline network with Alibaba’s technological and financial resources.
The collaboration could significantly disrupt South Korea’s e-commerce market, currently led by Coupang with 32.2 million monthly active users (MAU) in November 2024, followed by AliExpress (9.6 million MAU) and Gmarket (5.6 million MAU).
While Coupang’s direct-purchase model and Naver’s price-comparison dominance remain strong, Shinsegae and Alibaba’s alliance could introduce fresh competitive dynamics.
In addition to expanding market access, the joint venture plans to invest in technology and product offerings, aiming to deliver a top-tier customer experience. Shinsegae also sees this partnership as a stepping stone for promoting K-products on a global scale, contributing to Korea’s soft power in international markets.
However, challenges remain. AliExpress has faced criticism for safety compliance issues with some of its direct-purchase products. Ensuring rigorous safety standards and addressing consumer concerns will be critical for the success of this partnership.
“By building a strategic partnership with Alibaba, we’re not only opening global opportunities for domestic sellers but also pioneering a new e-commerce ecosystem that enhances customer experience,” a Shinsegae spokesperson stated.
The joint venture represents a pivotal moment for Shinsegae as it seeks to turn Gmarket’s fortunes around and establish itself as a formidable force in both the domestic and international e-commerce arenas. With the launch planned for 2025, both companies hope to capitalize on the opportunities ahead, setting the stage for a new era of innovation in 2025 and beyond.
Ashley Song (ashley@koreabizwire.com)
