Alibaba Group Holding Ltd (NYSE:BABA) is supposedly in the process of holding talks with the South Korean city of Incheon over a planned investment project worth about 1 trillion won, or $923 million, according to local media reports. The local daily Dong-A Ilbo initially reported the story on Monday, dubbing the proposed project as “Alibaba Town” as quoted by International Business Times. The project will be built in Yeongjongdo Island, an economic zone in close proximity to the Incheon International Airport, according to the report.
The city of Incheon is supposed to join forces with Alibaba Group Holding Ltd (NYSE:BABA) in undertaking the project, with the city and the Chinese internet giant retailer putting in equally proportionate investments. Located 40 kilometers west of Seoul, the port city of Incheon is known to have been in financial straits even as it undertook costly projects such as the Incheon Asian Games the previous year. The city is reportedly in debts amounting to 3.2 trillion won by the end of 2014.
Dong-A Ilbo went on to report about the details of the project without citing any source, outlining that it would be a comprehensive business district that consist of cultural events facilities, a hotel, a logistics center, and a shopping mall, all within an area estimated to be 1 million square meters in size. In August of the previous year, Alibaba Group Holding Ltd (NYSE:BABA) CEO Jack Ma met with South Korean President Park Geun-hye, and Park asked for Alibaba’s assistance to small and medium sized South Korean businesses in accessing the Chinese e-commerce market.
Citing Alibaba Group Holding Ltd (NYSE:BABA)’s post in its official Sina Weibo account, however, the Global Times reported that the earlier stories of collaboration between the city of Incheon and Alibaba is “ false and based on total speculation,” although the giant web retailer acknowledged the potential of South Korea as a massive market in the said post. An unnamed Alibaba spokesman reiterated the same statement regarding the supposed project in an email to the Economic Times, adding that “any disclosures regarding our investments will be announced through the proper channels.” On the other hand, an unnamed city official told The Korea Herald that the city is indeed in discussions with Alibaba regarding the proposed project to help the city overcome its financial woes. “While we are taking an aggressive and strategic approach for the investment, we have not yet made any decisions at present” the official added.
This article has been written by Nonito Guntan.