Chinese e-commerce giant Alibaba will form a joint-venture online shopping operation with South Korean retailer E-Mart. U.S.-listed Alibaba stock nudged higher in early Thursday trading following the news.
Alibaba and E-Mart will combine the assets of their separate e-commerce platforms in South Korea — AliExpress Korea and Gmarket — for the venture, though both platforms will still operate independently. The deal was first reported by Bloomberg Thursday and then confirmed in a regulatory filing by E-mart in South Korea.
The joint venture could be valued at about $4 billion, according to Bloomberg, which cited anonymous sources.
The deal comes as Alibaba is restructuring its overall e-commerce operations. The tech giant said in November that it would combine its domestic Taobao and Tmall Group with its international e-commerce operations into a single business division. With consumer spending sluggish in China, international e-commerce has been a bright spot for Alibaba. International retail sales jumped 35% to 25.6 billion yuan in Alibaba's September-ended quarter. Sales for the Taobao and Tmall Group, meanwhile, were flat compared with a year ago at 212.4 billion yuan.
Meanwhile, the joint-venture could add to an increasingly competitive e-commerce market in South Korea. Coupang is the country's largest online shopping platform and has seen its U.S. shares gain 41% this year amid strong sales growth. But Coupang officials said earlier this year the company was investing in its platform to meet competition from e-commerce platforms out of China. Alibaba's AliExpress and PDD Holdings unit Temu are among shopping websites growing in the country.
E-mart, meanwhile, is part of the Korea-listed Shinsegae Group and operates stores throughout South Korea. In 2021, the company acquired a majority stake in eBay's South Korea operation for roughly $3 billion.
Alibaba Stock: Up 10% This Year
On the stock market today, Alibaba stock is up a half-percent at 85.92. Alibaba stock has gained 10% overall this year.
U.S.-listed Alibaba shares rallied 27% in late September as government officials in China first rolled out stimulus plans.
But the gains have faded as investors debate the strength of China's stimulus efforts and the potential impact for the Chinese economy from tariffs by President-elect Donald Trump on imports into the U.S.
Alibaba stock lost 8% in October trading and 10% in November. Shares are down 2% so far for December.
Separately, Coupang stock was down 1% in premarket trading in the U.S. Thursday following the joint-venture news.
