Three-way competition will start in Korea’s online retail market
South Korea’s foremost discount chain Emart announced on June 24 that it will sign a 3.4 trillion won ($3 billion) stock purchase agreement to gobble up global giant eBay’s Korean operation.
By purchasing 80 percent of eBay Korea, Emart is expected to make its presence felt in the country’s online business. After the M&A, Emart’s online revenue would account for around half of its annual sales.
“In the future, only online behemoths will survive and thrive in the retail business,” Shinsegae Group said in a statement. “This deal is not about purchasing a company. It is about securing opportunities.”
Emart is a representative unit of Shinsegae Group headed by Vice Chairman Chung Yong-jin. eBay Korea is the country’s No. 3 e-commerce platform with a market share of around 12 percent, chasing Naver with 17 percent and Coupang with 13 percent.
Naver, Korea’s primary internet service provider, originally teamed up with Emart to acquire eBay Korea. But it decided to drop out for some reason.
HMC Investment & Securities analyst Kim Hyun-yong said that the price of 3.4 trillion won is appropriate in tandem with the recent performances of eBay Korea.
“The e-commerce market has three big outfits of Naver, Coupang, and Emart-eBay Korea. The three-way competition will become stiffer,” he said.
eBay Korea runs GMarket, Auction, and G9. It was once a dominant e-commerce platform but lost its top position because of Naver and Coupang.
“eBay Korea has a few brands, and so does Shinsegae Group’s e-commerce business. It would have to adopt a single-brand strategy just like Amazon and Coupang,” Sookmyung Women’s University business professor Seo Yong-gu said.
An eBay Korea spokesman declines to make comments.