South Korea's retail conglomerate Shinsegae Group and China's Alibaba Group are set to clinch a strategic alliance.

According to Shinsegae on Thursday, it plans to establish a fifty-fifty joint venture with Alibaba International, a subsidiary of Alibaba.

Shinsegae will enter the deal by investing through its GMarket e-commerce platform.

Both GMarket and AliExpress Korea, Ali's Korean entity, are expected to be incorporated into the joint venture, dubbed “Grand Opus Holding,” set to take off next year, while maintaining their independent operation.

An industry source was quoted saying that the strategic partnership is widely viewed as an alliance against South Korea's e-commerce giant Coupang in the domestic market.