On Wednesday, June 16, eBay Korea will sell its business unit to the department store franchise Shinsegae Group and e-commerce firm Naver for about ₩4 trillion or $3.6 billion.
The multinational corporation is South Korea’s third-largest e-commerce company, with a market share of about 12.8% last year.
It is also managing some local platforms, which include Gmarket, Auction, and G9.
Meanwhile, its buyer Shinsegae and Naver formed a retail and e-commerce partnership recently in March.
Both firms take stakes worth ₩250 billion in each other’s affiliates.
South Korea represents the world’s fourth-largest e-commerce market and due to the COVID-19.
Last Monday, the spokesmen of both retail giants Lotte Shopping and Shinsegae Group confirmed that both firms submitted separate intent letters for acquiring eBay Korea.
This deal will certainly shake the country’s e-commerce retail sector, making the nation’s largest retailers the leading omnichannel operator.
Since eBay has been on sale since last year, we guess that the biggest mobile carrier SK Telecom and the private equity firm MBK Partners, dropped the race in buying the firm.
Furthermore, South Korea’s e-commerce business spiked 25% last year. In total eBay, Korea represents an estimated 12.8% of the nation’s online market.
These sales follow Coupang at 13% and the leading market Naver with 18%.
eBay’s Korean revenue should be at $1.17 billion with an operating income of $76 million.
Meanwhile, Coupang was recently listed on the New York Stock Exchange in March. It became the largest Asian company since Alibaba went public in the US and raised $4.6 billion.
The firm is South Korea’s most valuable start-up with a market capitalization of more than $60 billion.
E-commerce MarTMN – eBayket Race
On the other hand, the country’s e-commerce market is racing against each other.
The market shares of Lotte and Shinsegae in the country’s e-commerce sector are estimated to be only 5% and 3%, respectively.
Both corporations had a hard time catching up with the major online competitors, especially following the coronavirus pandemic’s impact.
Therefore, eBay Korea’s takeover could reshape the nation’s online retail market.
Also, it can fast-track Shinsegae and Naver’s leading position in the market, being the winning bidder of the online retail shop. Due to this, Naver could be one of the biggest beneficiaries of Shinsegae since it offers support in financing any acquisition.
At present, eBay Korea uses its own online payment, which is Smile Pay.
However, Shinsegae might switch to Naver Pay as the payment platform for eBay’s e-commerce website in the country, which includes Gmarket, Auction, and G9.