Shinsegae-Alibaba tie-up gets conditional nod

South Korea's antitrust regulator has conditionally approved a high-stakes joint venture between Shinsegae Group’s e-commerce unit Gmarket and Chinese tech behemoth Alibaba Group’s e-commerce platform AliExpress.

The Fair Trade Commission announced Thursday that it would allow the partnership to proceed, but only under strict conditions preventing the integration of domestic consumer data between the two companies — a first in Korea’s merger review history.

“This is Korea’s first merger ruling that directly tackles the antitrust risks of data integration in the digital economy,” said Lee Byung-geon, director general of business trade and M&A bureau at the Fair Trade Commission.

The ruling represents a landmark moment in the evolving scrutiny over data consolidation, highlighting regulatory concerns that the alliance could lead to increased market entry barriers, consumer lock-in and dominance reinforcement in Korea’s fast-expanding cross-border e-commerce sector.

According to the FTC, AliExpress currently commands a leading 37.1 percent market share in the cross-border direct import market, while Gmarket ranks fourth with 3.9 percent. The combined entity would control 41 percent of the market, consolidating its leadership position.

The regulator expressed particular alarm over the potential integration of Gmarket’s 50 million domestic consumer profiles with Alibaba’s global behavioral datasets, AI-powered pricing algorithms and cloud-based analytics.

Such a combination, the FTC warned, could result in a “full-cycle consumer lock-in,” granting the joint entity unrivaled predictive power over Korean consumers’ preferences, behaviors and price sensitivities — potentially undermining fair market competition.

To mitigate these risks, the FTC imposed three core behavioral remedies: Gmarket, Auction and AliExpress must remain as separately operated entities; robust data firewalls must be established to prevent any data sharing between platforms; and technical barriers must be implemented to block backend system integration and algorithmic overlap.

These measures will be in place for a period of three years, with the possibility of extension depending on future market conditions.

Despite the stringent safeguards, the FTC noted the partnership could inject new vitality into Korea’s reverse direct purchase market, where Korean sellers use overseas platforms to reach international buyers.

“The latest merger is expected to breathe new life into the reverse direct purchase market, as it will allow Korean sellers to more easily tap into overseas demand through global shopping platforms such as AliExpress,” Lee said.