The Fair Trade Commission has begun its review of the merger for the establishment of a joint venture between Shinsegae Group and Alibaba Group.
On the 24th, the Fair Trade Commission noted that it received a merger notification regarding the establishment of a joint company between Shinsegae Group and Alibaba International of China. The joint company's name will be "Grand Opus Holding," with Emart affiliate Apollo Korea and Alibaba affiliate BK4 each contributing 50% of the equity for its establishment.
Through this merger, Apollo Korea will contribute 100% of the equity in Gmarket as a non-cash contribution. BK4 will invest $225 million (approximately 320 billion won) in cash along with 100% equity in AliExpress Korea.
Gmarket is a leading open market platform that ranks third in the domestic e-commerce market share, following Coupang and Naver. Since establishing its Korean entity in 2023, AliExpress has rapidly expanded its market share based on aggressive pricing strategies and product diversity, with evaluations suggesting it has surpassed Gmarket in terms of monthly active users.
This merger is expected to affect the overall market, not only through horizontal integration in the open market sector but also due to the potential for mixed integration with payment services such as Smile Pay and SSG Pay. Competition with existing platforms is also anticipated to intensify. The industry is paying attention to the possibility that this merger could lead to a three-way competition structure in the domestic e-commerce market involving Coupang, Naver, and Shinsegae-Alibaba.
The Fair Trade Commission plans to assess whether there are any competitive restrictions by comprehensively considering changes in market share due to the emergence of the joint company and the effects of excluding competing businesses, in accordance with the Fair Trade Act. Approval will be granted for the establishment of the joint venture if there are no concerns about competition restrictions; otherwise, it may not be approved.
The review period for the merger is 30 days from the date of notification. If necessary, it can be extended up to 90 days. A Fair Trade Commission official stated, "Given the expected significant impact of this merger on the domestic e-commerce market, we plan to conduct a thorough review in accordance with the Fair Trade Act criteria, gathering opinions from competitors and experts."