South Korea's Shinsegae Group and China's Alibaba Group Holding Ltd. have announced plans to establish a joint venture aimed at strengthening their positions in the competitive South Korean e-commerce market. The joint venture, tentatively named Grand Opus Holdings, is expected to be launched in 2025 and will incorporate Shinsegae's Gmarket and Alibaba's AliExpress Korea. Despite being part of the joint venture, both platforms will continue to operate independently.

Shinsegae, a major South Korean retail conglomerate, will invest its entire stake in Gmarket into the new entity. This strategic move is seen as a response to the challenges Gmarket faces from local e-commerce giants like Coupang and Naver, as well as increasing competition from Chinese platforms such as AliExpress and Temu.

The partnership is expected to leverage Alibaba's extensive global network, which spans over 200 countries, to help Gmarket expand its reach internationally. This move is anticipated to provide new opportunities for Korean sellers to access global markets, potentially boosting the sales and distribution of Korean products.

Alibaba, which has been actively expanding its presence in South Korea, views this joint venture as a means to increase its market share in the region. The collaboration is seen as a "win-win" for both companies, allowing Gmarket to utilize Alibaba's global sales network and enabling Alibaba to attract more Korean sellers and consumers to its platforms.

The joint venture is valued at approximately 6 trillion won and is expected to reshape the e-commerce landscape in South Korea. Analysts believe that the partnership will create significant synergies, combining Shinsegae's domestic distribution expertise with Alibaba's e-commerce and IT capabilities.

This strategic alliance comes at a time when Alibaba is looking to recover from missed sales estimates in the previous quarter, attributed to reduced consumer spending in China amid economic challenges. Meanwhile, Shinsegae is seeking to strengthen its e-commerce operations following its acquisition of Gmarket from eBay in 2021 for 3.44 trillion won.

The formation of this joint venture marks a significant development in the ongoing competition within South Korea's e-commerce sector, as Shinsegae and Alibaba aim to challenge the dominance of Coupang and Naver.