Shinsegae Group and China's Alibaba Group have decided to join forces to target the domestic e-commerce market. The main point is that Shinsegae Group's Gmarket and Alibaba Group's AliExpress will establish a joint venture. As a result, the share price of E-Mart, which holds 80% equity in Gmarket, has surged.
E-Mart shares were traded at 80,600 won in after-hours trading following the market close at 4:20 p.m. on the 26th. This is an increase of 6.75% (5,100 won) from the closing price of 75,500 won on that day.
The partnership plan between Shinsegae Group and Alibaba Group appears to have stimulated investor sentiment. As Bloomberg reported the related news just before the market closed that day, the E-Mart share price finished 5.45% (3,900 won) higher than the previous day.
Shares of Shinsegae, Shinsegae International, and Shinsegae I&C, all of which saw declines during regular trading that day, are also showing strength in after-hours transactions.
Shinsegae Group has decided to fully invest the 80% equity it holds in Gmarket through E-Mart into the joint venture, Grand Opus Holding. Alibaba Group also plans to invest its stake in AliExpress Korea and 300 billion won in cash into the joint venture.
The joint venture is reported to have a corporate value of about $4 billion (approximately 5.9 trillion won). The equity in the joint venture will be held equally by both groups. E-Mart expressed its expectation of creating synergy through cooperation with Alibaba and securing competitiveness in the e-commerce market.
With E-Mart’s stock price rising for the first time in a while, shareholders also expressed optimism. E-Mart's share price had dropped to 54,800 won in June this year, marking the lowest price since its partitioning following re-listing in 2011.
In the E-Mart discussion room, posts appeared saying, 'I will go to E-Mart to shop' and 'I will sleep comfortably for the first time in a long time.' There were also reactions directed at Chung Yong-jin, chairman of Shinsegae Group, stating, 'Thank you. I will be grateful.' and '(U.S. President-elect) Trump is meeting and doing business with China; he is versatile.'