SEOUL, South Korea — South Korea's Shinsegae and affiliate E-Mart said they were set to gain $940 million in funding from private equity firms, laying out ambitions to become the leading e-commerce retailers in one of the world's most wired countries.The funding from Affinity Equity Partners and BRV Capital Management, both Asia-based private equity funds, will help the firms capitalize on a surge in supermarket chain E-Mart's popularity due to its quick delivery of fresh products."E-Mart is unrivaled in the online supermarket market," said Seo Jung-yeon, an analyst at Shinyoung Investment.Shares in both firms soared to six-year highs on the preliminary deal with E-Mart jumping 14 percent to see its market capitalisation hit $7.6 billion while Shinsegae gained 7 percent to be valued at $3.1 billion.Investment into online grocery services are picking up steam, with Amazon.com Inc buying Whole Foods Market Inc for $13.7 billion last year.This week alone in Asia, Wal-Mart Stores Inc said it has struck a partnership with Rakuten Inc to launch an online grocery delivery service in Japan. While Alibaba Group Holding Ltd and U.S. grocer Kroger Co have had early discussions on working together, a source familiar with the matter said.E-MART EDGEE-Mart's growth has helped department store operator Shinsegae, relatively new to e-commerce, notch up double-digit increases in online sales in recent years.By 2023, Shinsegae has said it wants to boost annual online sales five-fold to 10 trillion won ($9.4 billion) and become South Korea's No. 1 e-commerce firm. Currently, eBay 's South Korea's units lead the online shopping market.Under the deal, the two firms will spin off and combine their online business units to launch a separate company this year. The private equity firms will invest 1 trillion won by either purchasing new shares or by other methods, Shinsegae said in a statement.A Shinsegae spokesman said the latest funding could help finance potential acquisitions of other online firms in the longer term.Seo at Shinyoung Investment said Shinsegae's online business had broken even in the second half of 2017, even as other rivals like SoftBank-backed Coupang are still suffering from huge losses because of razor-thin margins.Online grocers in South Korea have an advantage over competitors in other countries as about half of the country's population resides in Seoul and its surrounding areas.E-Mart is likely to grab the lion's share of the market given that firms need substantive logistics infrastructure to maintain freshness, creating a high entry barrier for newcomers, Hana Investment & Securities said in a report this month.By Hyunjoo Jin; editor: Edwina Gibbs.