Parcel boxes are piled at a terminal of CJ Logistics in Seoul in this Jan. 26, 2023 photo. Yonhap
CJ Group will enjoy an unexpected benefit from the recent partnership between Shinsegae Group and Alibaba International, as its logistics arm is widely forecast to secure more parcel orders from the two e-commerce clients, market watchers and industry officials said Friday.
The analysis came a day after Shinsegae Group and Alibaba International announced a plan to establish a joint venture to combine their strengths for their e-commerce platforms, such as Shinsegae's e-commerce platform Gmarket and Alibaba's Korean operations AliExpress Korea, both of which become affiliates of the joint venture.
This will pave the way for Gmarket sellers to expand their sales territories abroad by utilizing Alibaba's unmatched global network.
Market analysts expected CJ Logistics to greatly benefit from the alliance between Gmarket and AliExpress.
“CJ Logistics handles almost 80 percent of parcel delivery from AliExpress Korea, and the quantity of goods ordered from the platform is on the gradual rise,” Meritz Securities analyst Oh Jung-ha said.
In June, the CJ affiliate also formed a logistics alliance with Shinsegae Group to handle delivery services for the group's major e-commerce platforms, such as SSG.com and Gmarket. Under the partnership, CJ Logistics has been in charge of delivery for orders from Gmarket as of the third quarter of 2024. It will also start handling parcel delivery from SSG.com in the first quarter of 2025.
“CJ Logistics is a strategic partner for Gmarket and AliExpress,” the analyst said. “Given that AliExpress secures massive capital strength and Gmarket wins trust from local customers, both firms will be able to create synergies, which bodes well for CJ Logistics.”
Shares of CJ Logistics soared by more than 12 percent on Friday morning, fueled by expectations of sales growth from the alliance between Gmarket and AliExpress.
Coupang's delivery trucks are parked at a parking lot in Seoul, Nov. 6. Yonhap
Potential threat to Coupang?
However, industry officials said it remains to be seen whether the partnership will pose any immediate threat to Coupang, Korea's most influential e-commerce player.
According to data from market tracker Wiseapp Retail Goods, Coupang maintains its leadership in the nation's e-commerce market, with 32.2 million monthly active users (MAU) recorded in November. AliExpress came in second with 9.67 million monthly active users, while Gmarket was fifth with 5.62 million MAU during the same period.
“Even if the figures from AliExpress and Gmarket are combined, they still account for less than half of Coupang's total,” a retail industry official said.
Coupang proved its resilience even after raising its monthly membership fee by more than 60 percent in August, during which the e-commerce giant has not reported any significant loss of customers.
“Coupang customers remain loyal to the platform largely due to the firm's ultra-fast Rocket Delivery service, so chances appear slim for Coupang customers to abruptly flock to Gmarket or AliExpress unless they launch any similar rapid deliver services,” the official said.
However, the partnership may create a game-changing opportunity for sustainable growth of the two e-commerce platforms if they expand their footing in overseas direct purchases by taking advantage of Alibaba's global network prowess, according to the official.