What: Shinsegae Group and Alibaba's strategic alliance creates a formidable challenger to Coupang's e-commerce dominance in South Korea through the merger of Gmarket and AliExpress operations.

Why it is important: This strategic consolidation represents a significant shift in South Korea's e-commerce sector, as traditional retailers partner with global tech giants to compete in the world's fourth-largest e-commerce market, challenging established digital leaders.

Shinsegae Group and Alibaba Group have formed a strategic alliance that could significantly alter South Korea's e-commerce landscape. The partnership, announced on January 6, will create a joint venture combining Shinsegae's Gmarket with Alibaba's AliExpress, directly challenging Coupang's market leadership. The collaboration has prompted immediate strategic responses from Coupang's senior executives, who convened to assess the impact and develop counterstrategies. The joint venture aims to leverage Gmarket's extensive network of 600,000 sellers to meet growing international demand for Korean products while strengthening its domestic market position. Current market data shows the combined monthly active users of AliExpress, Gmarket, and Auction reaching USD 13.9 million, approaching half of Coupang's USD 32.02 million user base. While Coupang maintains a dominant 57.53% market share with USD 2.2 billion in transaction volume, the new alliance's collective share of USD 421.040 million (10.93%) positions them for potential growth through increased K-product offerings and aggressive discount campaigns. Enhanced logistics capabilities, including new seven-day delivery services, further strengthen their competitive position against Coupang's signature Rocket Delivery service.

IADS Notes: The Shinsegae-Alibaba alliance announced in January 2025 marks a pivotal moment in South Korea's evolving e-commerce landscape. This partnership follows significant market shifts throughout 2024, where online shopping surpassed in-store sales for the first time , capturing 50.5% of the market. While Coupang maintained its leadership position with substantial profits in February 2024 , it faced challenges including a USD 102 million fine for algorithmic manipulation in June. The growing influence of Chinese platforms, evidenced by AliExpress's 130% user growth , has prompted traditional retailers to seek strategic partnerships. Shinsegae's November 2024 restructuring , separating its department store and E-mart operations, laid the groundwork for this alliance, demonstrating how established retailers are adapting to digital transformation. This collaboration, combining Gmarket's local expertise with Alibaba's technological capabilities, represents a strategic response to the increasingly competitive Korean e-commerce market, where innovation in logistics and digital integration has become crucial for survival.

Shinsegae, Alibaba team up, challenging Coupang’s e-commerce lead in Korea