eBay is to sell its business in South Korea. Big name players in retail are all in for a deal valued at KRW5 tn (US$4.42 bn).
Four-way race for the acquisition
Lotte Group, Emart Inc. (owned by Shinsegae), SK Telecom Co. and private equity firm MBK Partners have been chosen as the preliminary bidders to buy a controlling stake of eBay Korea. Kakao has decided to opt out of the bidding.
Shinsegae and Lotte have been seeking opportunities to strengthen their presence online. The two companies have developed SSG.com and Lotte ON as their respective online platforms.
MBK Partners, which owns Homeplus, is also eager to seize the opportunity to build up its online capability. Homeplus recorded less than KRW1 tn (US$890m) in online sales in 2020, far behind its rivals.
Imminent structural shift in Korea’s ecommerce market
eBay Korea owns major ecommerce giants in Korea including Gmarket, Auction and G9, with a combined online market share of 12% to 14% (Statistics Korea 2019 data). Given its size, the sale is likely to restructure the country’s ecommerce market.
eBay Korea achieved over KRW1.95 tn (US$1.7 bn) in sales in 2019, which it said was a record-breaking performance for an open market business. Its operating profit during the same period jumped 27% year-on-year to KRW61.5 bn (US$54m). It has managed to stay in the black for 15 consecutive years. However, the company began trailing behind rivals such as Coupang in recent years as competition heated up.