Competition in the Korean e-commerce sector is fierce; Shinsegae acquires 80% of eBay Korea shares

Recently, eBay announced that it has transferred 80.01% of eBay Korea's shares to E- mart , a subsidiary of South Korean retail giant Shinsegae Group, for approximately 3.44 billion won ( approximately US$3 billion ). eBay will continue to hold 19.99% of the shares of its Korean business , including G-Market, IAC and G-9.

Jamie Iannone, CEO of eBay , said: " We are pleased to complete the transaction between eBay Korea and E-mart , bringing together two strong e-commerce and retail companies . We believe this transaction enables eBay to further focus on growing our core marketplace and will provide additional value to our customers, employees and shareholders. "

Some analysts say that through the latest acquisition, Shinsegae will join the competition between Naver and Coupang, which dominate the local e-commerce market.

It is understood that in South Korea, Naver is the main portal website. Most online shoppers search for products through the website. Naver is a platform that connects consumers with suppliers on various open markets. Coupang's business model is different from Naver. Coupang directly purchases and delivers most of its products.

With the latest acquisition, New World's core competitiveness will be the synergy between its offline sales channels and e-commerce platform.

E-mart's strength lies in its early delivery service for online groceries. E-mart has three state-of-the-art automated distribution centers and 160 offline stores. eBay Korea operates the open market platforms G-Market, IAC and G-9. eBay Korea will share with Shinsegae its valuable database of customers and suppliers that it has operated here for the past 20 years.

Previously, Shinsegae's online sales channel SSG.com accounted for 3% of South Korea's total e-commerce transactions, while eBay Korea accounted for about 12%; rival Naver accounted for 18% and Coupang accounted for 13%. After Shinsegae acquires eBay Korea, its market share will be greatly improved. Market experts predict that after the acquisition, Shinsegae's annual transaction volume will jump to US$21.2 billion, challenging Naver's annual transaction volume of US$24.7 billion.

Shinsegae was initially reported to have teamed up with Naver to bid for eBay Korea, with the latter planning to cover about 20% of the acquisition cost. But Naver later withdrew due to differences in the acquisition price and its contribution to the transaction.

Shinsegae and Naver will nonetheless continue to work together based on their existing partnership. The two entities exchanged $221 million in shares and plan to collaborate on online and offline retail and sales.

eBay

South Korea