Alibaba Group Holding Ltd. is reportedly close to merging its South Korean operations with E-Mart Inc.’s e-commerce platform in a deal that could create a $4 billion joint venture, according to sources familiar with the matter.
The two companies are finalizing the details, with an official announcement expected as soon as this week. However, discussions are ongoing, and the timeline may extend. Representatives for Alibaba and E-Mart have not commented on the matter.
The proposed merger aims to enhance competition against local players like Naver Corp. and Coupang Inc., as South Korea’s online retail market continues to grow despite recent economic challenges. The country’s consumer confidence saw a sharp drop this month amidst political instability following President Yoon Suk Yeol’s impeachment and martial law declaration.
For Alibaba, this move aligns with its strategy to expand internationally as growth in its core Chinese e-commerce business slows. The company’s domestic operations showed weak performance last quarter, while its international business, including platforms like Lazada and AliExpress, saw improvements.
E-Mart has also been scaling up its e-commerce presence. In 2021, it acquired a controlling stake in eBay’s South Korean marketplace for $3 billion, boosting its customer base in groceries and general merchandise.
E-Mart shares have fallen 7% this year, valuing the company at $1.4 billion. Meanwhile, Alibaba’s Hong Kong-listed stock has risen 11%, bringing its market value to over $200 billion.