With the Fair Trade Commission conditionally approving on the 18th the business combination between Gmarket, an affiliate of Shinsegae Group, and AliExpress Korea, an affiliate of China's Alibaba, the joint venture "Grand Opus Holdings" has been launched. The corporations' equity split is 50-50. A new e-commerce (electronic commerce) company funded half by Korean capital and half by Chinese capital has been created. Shinsegae Group and Alibaba have begun working-level tasks for organizing the joint venture, convening the board of directors, and establishing business plans.
The joint venture will operate with Gmarket and AliExpress Korea as subsidiaries. Gmarket will begin enabling sellers to go global within this year by leveraging AliExpress's worldwide distribution network. The e-commerce industry is watching closely to see how the launch of Grand Opus Holdings might reshape a market long led by Coupang and Naver.
According to related industries, the segment most affected by the launch of the joint venture will be the domestic online cross-border direct purchase market. That is because AliExpress holds a 37.1% market share and Gmarket holds 3.9% in Korea's online cross-border direct purchase market. A distribution industry official said, "As this is a meeting between the No. 1 and No. 4 players, the new company's market dominance in cross-border direct purchases is bound to grow."
This is why the Fair Trade Commission granted conditional approval. The Fair Trade Commission ordered Gmarket and AliExpress to operate independently of each other and to technically separate domestic consumer data. An e-commerce industry official said, "Although the conditions are limited to three years, it is still meaningful for competitors in that a check has been placed on the birth of an unbeatable Goliath."
Gmarket has begun full-fledged preparations to help sellers expand overseas. About 600,000 sellers registered on Gmarket are expected to be able to sell products to overseas customers within this year. Gmarket sellers have about 20 million items to sell abroad. As most of the products are excellent goods from Korean small and midsize enterprises, significant export effects are expected.
Overseas sales will proceed by onboarding to Alibaba's global platform through Gmarket. The first target markets are five Southeast Asian countries: Singapore, Vietnam, Thailand, the Philippines, and Malaysia. These are places with strong popularity and preference for K-pop and Korean products. Following Southeast Asia, sales channels will gradually expand to more than 200 countries and regions where Alibaba operates, including Europe, South Asia, South America, and the United States.
Gmarket sellers will receive benefits beyond simply listing products on a global platform. They will be able to use a systematized process across all stages, including customs clearance, logistics, local delivery and returns, and customer management.
Shinsegae Group and Alibaba said, "We will actively support the global expansion of Korean sellers to increase overseas sales of excellent Korean products." They also said, "Through collaboration, we will greatly expand product choices for customers and provide an advanced shopping experience."
In Korea's e-commerce market, a full-fledged three-way battle is expected to unfold alongside the competition between Coupang and Naver. According to the retail analytics service Wiseapp Retail, as of last month, Coupang had the most monthly active users (MAU) in Korea's e-commerce market at 34.22 million. Naver Plus Store's MAU was 4.31 million.
The Gmarket–Ali joint venture rises to roughly No. 2 by MAU. That is the result when adding AliExpress's 9.2 million, Gmarket's 6.68 million, and Auction's 2.66 million. Gmarket also operates Auction.
The industry is watching for the effects once Alibaba's advanced technology is applied. A Shinsegae Group official said, "Shoppers will enjoy a level of hyper-personalized shopping that has not been experienced domestically," adding, "Through a personal shopping assistant similar to what is being implemented on Alibaba's global platform, customers can receive 24-hour tailored product recommendations and consultation services."
Consumer loyalty segments could also act as a variable in shifting the e-commerce landscape. Gmarket and AliExpress do not have as many loyal consumers as Naver or Coupang. By contrast, Naver and Coupang succeeded early on in locking in consumers through membership services.
A distribution industry official said, "The two companies merged based on shared interests to complement each other's weaknesses," adding, "We will have to wait and see what strategy they take for the time being. For now, there is a high possibility that price competition in the e-commerce market will intensify."