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Why Alibaba stock fell nearly 4% today

Its apparent efforts to enter the neighboring country’s e-commerce market have been less than impressive. Alibaba (Baba -3.91%) Investors on Thursday. They traded shares of the Chinese online retailer, ending the day with the U.S.-listed stock down 3.9%. In comparison, sluggish S&P 500 The index lost only 0.3% of its value.

New momentum in Korea?

Nikkei Asia cited a report from Korea’s Yonhap News and published an article saying that Alibaba will invest $1.1 billion in Korea. The intention is to build a logistics network to compete with domestic e-commerce leaders. Coupang.

Alibaba will likely leverage its ability to offer low prices and use its strong logistics efforts to get goods to customers quickly.

Alibaba’s AliExpress brand is already present in Korea. The company’s plans will significantly expand AliExpress’ presence. For example, we plan to build a logistics hub on a 180,000 m2 site near the capital Seoul. The article states that the company is currently in the process of selecting a location.

Other plans include a call center with 300 employees and a purchasing department to sell Korean products overseas.

Alibaba has not yet officially commented on the report.

one tough market

Although South Korea is geographically much smaller than China, it nonetheless has a well-established and thriving market economy filled with entrenched competitors. Alibaba already has a foothold in that market, but is up against the country’s 300-pound online retail gorilla. Assuming the company delivers on these apparent plans, many investors will be keeping an eye on the company to see if they can get a meaningful stake from Coupang.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has a position at Coupang and recommends it. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.

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