According to reports in local newspapers in South Korea on Wednesday, the South Korean business of eBay will sold by the American company to local retailer Shinsegae Group’s e-Mart Inc and web portal operator Naver in a deal worth about 4 trillion won ($3.6 billion).
According to Euromonitor, with a market share of about 12.8 per cent in 2020, eBay Korea is the third largest e-commerce firm of South Korea. The company operates three online platforms in the country – Gmarket, Auction and G9.
After entering a binding bid for acquiring eBay Korea this month, it was talking with eBay Inc also, e-Mart said in a regulatory filing on Wednesday even though the company also confirmed that no final deal had been finalised as yet.
There were no comments on the reports from Naver and eBay Korea.
According to reports published in the Korea Economic Daily and other newspapers quoting information from unnamed investment banking sources, also in the running for acquiring the business was Lotte Shopping.
The e-commerce market of South Korea is the fourth largest in the world. According to Euromonitor data, the growth of the market has been accelerated by coronavirus pandemic as the country’s e-commerce market has soared and accounted for 35.8 per cent of the entire retail market of the country in 2020.
In March this year, a retail and e-commerce partnership was formed by Shinsegae and Naver as each of the companies took up stakes worth 250 billion won in each other’s affiliates
While there has been some growth in eBay during the pandemic with people turning to the e-commerce platform of the company, originally founded in San Francisco, to make the bulk of their shopping, the firm was unable to compete with the growth that was witnessed by rivals such as Amazon and has been forced to scale down its business expenditures because of investor pressure.
EBay has sold StubHub, its events tickets marketplace, in 2020 to Viagogo in a deal worth $4.05 billion. According to reports, the company had also been forced into selling off its classifieds business to Norway-based Adevinta for a cash-and-stock deal worth $9.2 billion after which eBay had 44.4 per cent of stock left in the company.
Despite these, the company claimed to still have 183 million active buyers. The South Korean business arm of the company generates about 11 per cent of the total global revenues of the company annually.
There were reports in the media in 2020 about eBay planning to sell off its South Korean unit. That business includes one of the biggest online marketplaces of South Korea – Gmarket which was acquired by eBay in 2009 for about $1.2 billion. That business was later merged by eBay with Internet Auction, another South Korean company. At that time of the merger, the combined entity had control over 87 per cent of the consumer-to-consumer market and more than 30 per cent of the online shopping mall market of South Korea.