China-based Alibaba Group Holding Limited (HK:9988) reportedly plans to invest $1.1 billion in South Korea over thenext three years to expand its business in the country. According to the news agency Yonhap, the company will allocate $200 million this year toward the construction of a logistics center in South Korea. Alibaba also intends to allocate $100 million to support small and medium-sized enterprises in the country in marketing their products internationally.
Alibaba shares saw a decline of 0.74% in today’s session. Year-to-date, the stock has experienced fluctuations but ultimately remains relatively flat, with a loss of 1.67%.
Alibaba is a Chinese technology company widely known for its online marketplace.
Navigating Challenges: South Korea in Focus
According to the Korea Customs Service, China surpassed the U.S. as the largest foreign online market for Koreans in terms of value in 2022. As a result, Korea emerges as a significant market for Alibaba to prioritize its growth beyond China. The company is actively competing to attract Korean customers and expand its market share in the region.
Recently, Alibaba’s shopping platform, AliExpress, came under the scrutiny of South Korean data protection watchdogs due to rapidly increasing consumer complaints. The country’s antitrust regulator has also initiated an inspection of the platform to ensure the safety of its consumers.
Following these developments, South Korea announced a series of measures aimed at overseas online platform operators yesterday. As part of these measures, the government will mandate that these players establish local offices within South Korea.
Alibaba will further invest ₩100 billion in South Korea to strengthen its consumer protection duties.
Is Alibaba Stock a Good Buy Right Now?
On TipRanks, 9988 stock has received a Moderate Buy consensus rating from analysts, based on four Buy and two Hold recommendations. The Alibaba share price target is HK$100.87, which implies a growth rate of 36.3% on the current trading price.
