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According to people familiar with the matter, Ebay will sell its business in South Korea to a local consortium for $ 3.1 billion, while rivals try to increase the heat of the Coupang, backed by SoftBank, in the fourth largest e-commerce market in the world. world.
The consortium, made up of South Korea’s largest brick and mortar retailer, E-Mart and Internet group Naver, plans to buy an 80% stake in eBay Korea to earn $ 3.5 billion ($ 3.1 billion) , with the rest of the American company. said the people.
The purchase could help the consortium overcome rapid growth Coupang, which raised $ 4.6 billion in an initial public offering in New York in March to become the largest player in South Korea’s highly competitive e-commerce market. The Japanese technology group SoftBank is a major investor in Coupang.
Ebay Korea was the third largest e-commerce company in the country with a market share of 13% last year, according to research group Euromonitor. Its three platforms – Gmarket, Auction and G9 – registered Won20tn in transactions last year, according to data from Meritz Securities.
Euromonitor has forecast that South Korea’s e-commerce market will grow 11% this year, to $ 116 billion. But it is a fragmented market of more than a dozen players, with Coupang and Naver controlling 19% and 14% of the shares in terms of transaction volume, respectively.
South Korea is one of the largest and fastest e-commerce markets in the world, driven by its knowledgeable population, high-speed Internet infrastructure and densely populated environment. E-commerce accounted for 35.8% of the retail market last year, compared to 28.6% in 2019, according to Euromonitor data.
E-Mart plans to fund the agreement with Won3tn of asset-backed loans with the rest paid for its cash holdings, while Naver will provide Won100bn, according to an industry official close to the situation.
“Despite the funding structure, E-Mart needs Naver to make up for its weak online networks,” the official said.
Conglomerate Lotte Group and E-Mart were the final bidders for eBay Korea. Both have struggled to catch up with Coupang, which invests heavily in logistics to increase delivery times. Coupang nearly doubled its revenue last year to $ 12 billion as more consumers switched to online shopping during the Covid-19 pandemic.
“Both Lotte and E-Mart were eager to take over eBay’s operations, but E-Mart offered about $ 500 billion more,” the industry official added.
Naver is one of the most popular Internet portals in Korea and more than 40% of Korean eBay customers access it through the first search engine.
Shinsegae, E-Mart’s parent company, and Naver partnered in March exchanging stakes with each other for Won250bn.
Ebay Korea declined to comment. E-Mart said in a regulatory document that it was in talks with eBay, but the sale had not been completed. Naver said in a separate file that the deal had not been concluded.
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