South Korea’s retail giant Shinsegae Group is set to establish a joint venture with China’s Alibaba International this year, with Gmarket and AliExpress Korea becoming subsidiaries under the new entity. The joint venture will be equally funded by South Korean and Chinese capital. The retail industry is closely watching this bold move by Shinsegae Chairman Chung Yong-jin, who announced the partnership with Alibaba just days after returning from the United States late last month.
According to industry sources on Jan. 2, Shinsegae Group plans to jointly manage a new JV with Alibaba this year, leveraging Alibaba’s proven global expertise to enhance Gmarket’s competitiveness in the e-commerce market. Gmarket, acquired by Shinsegae for 3.44 trillion won from eBay Korea in 2021, has faced ongoing financial struggles, recording operating losses of 5.9 billion won in 2021, 65.4 billion won in 2022, and 32.1 billion won in 2023.
Industry speculation suggests several reasons behind the partnership between the two retail giants. This deal marks Chung’s first major move after returning from meeting U.S. President-elect Donald Trump on Dec. 22. Earlier, on Dec. 16, Chung spent five days at the Mar-a-Lago resort in Palm Beach, Florida, at the invitation of Trump’s eldest son, Donald Trump Jr. During his stay, Chung reportedly met with both President-elect Trump and Tesla CEO Elon Musk to discuss various business matters. Some industry experts believe Chung likely discussed potential U.S. investments, considering his ongoing business activities there.
The collaboration seems to align well with both companies’ needs. With direct access to the U.S. market blocked, AliExpress has turned to the South Korean market as an attractive alternative, expecting Shinsegae to serve as a bridge between the U.S. and Ali. For Shinsegae, the joint venture with Chinese capital could help recover Gmarket’s struggling performance. An industry insider commented, “One of the key goals of this alliance seems to be Alibaba’s strategy to create an alternative route through Gmarket in response to U.S. sanctions on Chinese products.”
With Trump’s second term expected to bring more aggressive policies against China, there’s speculation that China may use South Korea as a strategic base to bypass U.S. regulations. Trump has already announced plans to impose 60% tariffs on Chinese goods and may reinstate sanctions on Chinese-owned companies, including Alibaba and ByteDance, the parent company of TikTok, which were considered during his first term. An industry insider noted that this strategy is similar to how Chinese automakers established production facilities in Mexico to avoid U.S. tariffs, suggesting that Alibaba’s joint venture could be a way to navigate these trade barriers.
Some speculate that Shinsegae may eventually exit Gmarket after pushing it toward a more independent path, as it has decided to partner with Alibaba solely for Gmarket among its e-commerce businesses. One source explained, “The 50-50 joint venture structure suggests they might not be fully committed to keeping Gmarket, and they might gradually separate it from the group’s other e-commerce operations like Emart and SSG.com before an exit.”
