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eBay Korea set to fuel rivalry between retail, online giants

By Mar 08, 2021 (Gmt+09:00)

eBay Korea runs the Auction and Gmarket online shopping malls, as well as G9
eBay Korea runs the Auction and Gmarket online shopping malls, as well as G9

The planned sale of eBay Inc.’s South Korean operations is gathering steam ahead of Coupang Corp.'s US stock market listing this week, with the country’s dominant mobile platform Kakao Corp., retail giant Shinsegae and private equity firm MBK Partners touted as potential bidders.

Kakao was the first company to express interest in eBay Korea, shortly after the US online retailer decided to exit its Korean operations last year, according to sources with knowledge of the matter.

“When eBay Inc. decided to sell its 100% stake in its South Korean operations, Kakao tried to sit down at the negotiating table with sale manager Goldman Sachs to acquire eBay Korea in a private deal,” one of the sources told Market Insight on Mar. 8. Market Insight is the capital news arm of The Korea Economic Daily.

Now that eBay officially kicked off the sale process at the end of last year, around 10 potential bidders received investment memoranda, including Kakao and retailers Shinsegae, Lotte and GS Retail, as well as MBK Partners, which owns South Korea’s supermarket chain HomePlus.

Preliminary bids for eBay Korea, valued at 5 trillion won ($4.4 billion), are due for Mar. 18. Morgan Stanley and Goldman Sachs are handling the sale.

Despite stagnant sales growth and concerns over the overcrowded e-commerce market, eBay Korea drummed up strong interest after local rival Coupang applied for its US listing to raise up to $3.6 billion, a value much higher than earlier market projections for the e-commerce firm.

Entering the Korean market in 2000, eBay Korea expanded its presence by acquiring then Auction Co. Ltd. in 2001, and rival Gmarket in 2009. In 2013, the company also launched a curated shopping platform, G9.

Their combined annual transactions are valued at 20 trillion won with a market share of 12%, compared with Coupang’s 22 trillion won. Its prospective buyer will likely become the third-largest player in the country’s e-commerce market estimated at 161 trillion won ($141 billion) as of last year.

Industry watchers expect Kakao to go head-to-head with Shinsegae and MBK in its bidding for the e-commerce platform.


Kakao has been diversifying beyond its flagship mobile messaging app services into entertainment, payment settlement and taxi-hailing services. In the e-commerce sector, however, its lags far behind Korea's online platform giant Naver Corp. Kakao Commerce’s annual transactions came to only 4 trillion won last year, far below Naver’s 15 trillion won and Coupang’s 22 trillion won.

Shinsegae appears determined to buy eBay Korea and the retail giant is currently considering funding plans for the possible acquisition, according to the sources. Its e-commerce brand SSG.COM has been rapidly gaining territory, posting 37% year-on-year growth last year with 3.9 trillion won in transaction volume. But its e-commerce business is restricted to fresh groceries and luxury products.

“Until SSG.COM fell under the control of E-Mart CEO Kang Heui-seok last October, it had prepared to launch its own third-party e-commerce platform,” said one of the IB sources. “Now that eBay Korea is up for grabs, my understanding is that SSG.COM is considering various options.”

Market chatter is growing that Shinsegae Group Vice Chairman and de-facto leader Chung Yong-jin will join hands with SSG.COM’s No. 2 shareholder Affinity Equity Partners to acquire eBay Korea to better compete with deep-pocketed Coupang.

Coupang plans to utilize its IPO proceeds to further challenge retail giants Shinsegae and Lotte, as well as platform behemoths Naver and Kakao.

For MBK, eBay Korea could be a good fit for its Korean retailer HomePlus, under growing competition from online rivals, and may aid in its exit from the supermarket chain.

The North Asia-focused PEF acquired 100% of HomePlus for 7.2 trillion won ($6.6 billion) in 2015. After it recently lost to Affinity Equity Partners in the bid for JobKorea, the country's top recruitment portal, MBK may step up its efforts to take over the e-commerce platform.

Write to Dong-Hui Park at

Yeonhee Kim edited this article.
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