Lotte, Shinsegae, and Kakao... The Heated 'eBay Korea' Acquisition Battle Begins

Ahead of Preliminary Bidding on the 16th, Acquisition Candidates Mentioned
5 Trillion Won Valuation Deemed "Expensive" Amid Intense Strategic Moves

[Asia Economy Reporter Jo In-kyung] As eBay Korea's sale process, which is set to shake up the domestic online shopping mall market, kicks into full gear, major distribution conglomerates have entered a fierce game of one-upmanship over the investment benefits.

160 Trillion Won Online Shopping Market, eBay's 12% Market Share

According to the distribution industry on the 4th, Morgan Stanley and Goldman Sachs, the lead managers of eBay Korea's sale, distributed the Information Memorandum (IM) to potential buyers ahead of the preliminary bidding scheduled for the 16th. It is known that about ten candidates, including Lotte Group, Shinsegae Group, Kakao, Qoo10, and MBK Partners, received the IM.

These companies are seriously considering the acquisition as they can immediately gain significant competitiveness in the e-commerce market upon acquiring eBay Korea.

eBay Korea is estimated to have recorded sales of 1.3 trillion won based on commission fees from product sales last year, with an operating profit of 85 billion won. Considering the 161 trillion won domestic online shopping transaction amount compiled by Statistics Korea in 2020, this accounts for a 12% share.

In particular, with Coupang securing 4 trillion won through its U.S. stock market listing and planning aggressive investments, the remaining competitors see acquiring eBay Korea as an opportunity they cannot afford to miss.

Who Will Change the E-commerce Landscape?

Companies mentioned as acquisition candidates are tight-lipped about their participation in the preliminary bidding but are internally carefully reviewing the pros and cons of the acquisition.

Especially Lotte, which had been passive about acquisition due to lack of funds until recently, has started reassessing various possibilities as it has yet to find a solution to the sluggish performance of its integrated online shopping mall 'Lotte ON.' Officially, Lotte Group stated, "We cannot confirm whether we have received the Information Memorandum from the seller or are reviewing the acquisition," but competitors interpret this as tacit acknowledgment of acquisition consideration.

Hyundai Department Store Group has decided not to participate in this acquisition battle. A Hyundai Department Store official said, "Internally, we have decided to focus on our own specialized malls and are not considering acquiring eBay Korea at all," adding, "We have not even received the sale Information Memorandum."

Currently, Kakao is considered the most likely acquisition candidate. Kakao Talk Biz, which includes commerce business, recorded sales of 360.3 billion won last year. If Kakao acquires eBay Korea, its commerce business, currently centered on mobile gifts, will expand into an open market, increasing annual transaction volume to around 25 trillion won. It could instantly grow to rival Naver.

Shinsegae Group, which had been preparing to enter the open market centered on SSG.com, can also expand its scale through acquiring eBay. However, since SSG.com, which has been steadily growing with investments in logistics centers and dawn delivery, there are divided internal opinions on whether to invest huge funds to acquire eBay Korea. Last year, SSG.com's transaction volume was about 3.9 trillion won.

MBK Partners, the major shareholder of Homeplus, is reportedly considering the acquisition with the synergy of offline business in mind. The plan is to strengthen the relatively weak online business through eBay Korea.

So far, eBay has set the desired sale price at around 5 trillion won, which could rise if the bidding competition intensifies. A distribution industry insider said, "Although the sale price is considered somewhat expensive, considering eBay Korea's market share domestically, companies cannot ignore the possibility of competitors acquiring it," adding, "The final decision of each company will depend on how much synergy they can create by linking it with their existing businesses."