The Korea Fair Trade Commission has conditionally approved the business combination between Shinsegae Group's Gmarket (Gmarket and Auction) and China's Alibaba Group's AliExpress, leading to the launch of a joint venture between the two companies. This move allows the 'Shinsegae-Ali Alliance' to enter the domestic e-commerce market, which has been predominantly divided between Coupang and Naver. The previously entrenched duopoly in the e-commerce sector is likely to experience significant shifts.

On the 18th, the Fair Trade Commission conditionally approved the merger between Gmarket and AliExpress. The conditions stipulate that for the next three years, Gmarket's platforms, Gmarket and Auction, must be operated separately from AliExpress, and domestic consumer data between them must remain distinct.

Specifically, Gmarket and AliExpress must store and manage domestic consumer data independently. Additionally, they are prohibited from exchanging consumer data related to domestic online overseas direct purchases. To exchange consumer data related to domestic online shopping, which is not overseas direct purchase, they must obtain the consent of the respective consumers.

The Fair Trade Commission made this decision out of concern that the merger of AliExpress, the leading player in the domestic online overseas direct purchase market with a 37.1% market share, and Gmarket, the fourth-largest player with a 3.9% market share, would excessively increase market dominance.

A representative from the Fair Trade Commission explained, "Considering the increasing share of Chinese products in the domestic online overseas direct purchase market, there is a significant possibility that the market share of this joint venture could exceed 41% after the merger." The conditions are valid for three years, and the Fair Trade Commission may extend them based on market changes after this period. Gmarket and AliExpress must form an implementation monitoring committee to regularly report their compliance status to the Fair Trade Commission.

Gmarket and AliExpress Korea will operate as subsidiaries of the joint venture (Grand Opus Holdings), established with equal investment from Korea's Shinsegae Group and China's Alibaba International, under a 'one roof, two families' structure. Both parties have immediately commenced practical work for organizing the joint venture, holding board meetings, and setting business plans, with plans to announce their vision to customers and sellers once finalized.

The core subsidiary of the joint venture, Gmarket, will be able to directly sell approximately 20 million products from 600,000 sellers through Alibaba's international platform by the end of the year. The initial market entry will be in five Southeast Asian countries: Singapore, Vietnam, Thailand, the Philippines, and Malaysia. Support for sellers will be enhanced by utilizing Alibaba's global logistics, customs, and delivery systems. The sales channels are expected to expand to over 200 countries, including Europe and the United States. Gmarket sellers are also expected to enter AliExpress's Korean product section, 'K-Venue.' Additionally, Gmarket plans to enhance its 'hyper-personalization' services based on Alibaba's world-leading AI open-source model capabilities.

As of last month, Coupang had an overwhelming lead in monthly active users (MAU) with 34.22 million. With this merger, the combined MAU of AliExpress (9.2 million), Gmarket (6.68 million), and Auction (2.66 million) will exceed 18.54 million, surpassing half of Coupang's user base.

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