South Korean retail giant Shinsegae Group will merge grocery shopping malls to centralize online power.

According to Shinsegae Group on Tuesday, online businesses of department store unit Shinsegae and supermarket chain E-Mart will be merged into a new e-commerce company on March 1. It is part of efforts to reinforce the online business against fiercer competition.

E-Mart will own the majority 65.1 percent stake in the new e-commerce entity, and Shinsegae remaining 34.9 percent stake. The holding ratio could change later as it has drawn 1 trillion won ($893 million) investment from BRV Capital Management and Affinity Equity Partners in October last year for the merged operation.

Market experts expect reinforced online operation would bring more profits and earnings growth with management efficiency in joint investment and decision-making.

By Lee Yoo-jin and Lee Ha-yeon

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