The Turbulent E-commerce Market ... Lee Hae-jin, Jung Yong-jin, and Kim Beom-seok Reorganize as the 'Big 3'

Shinsegae Bets 4 Trillion Won on eBay Acquisition Less Than Six Months After Partnering with Naver
If Successful, Jumps to 2nd in E-commerce... Industry Expresses 'Winner's Curse' Concerns

[Asia Economy Reporter Jo In-kyung] The e-commerce market is shaking up. In the competition over the acquisition of eBay Korea, Shinsegae Emart formed a consortium with Naver and emerged as a strong candidate, reshaping the market from a two-horse race between Naver and Coupang into a big three consisting of Emart + eBay Korea.

If Emart ultimately acquires eBay Korea, the online shopping transaction volume, which was previously only about 40 trillion won, is expected to jump to 240 trillion won, positioning Emart as the second-largest player, surpassing Coupang.

Alliance of Online and Offline Powerhouses

According to industry sources on the 17th, with the Shinsegae Emart and Naver consortium's acquisition of eBay Korea virtually confirmed, the domestic e-commerce market is expected to rapidly reorganize.

Last year, the transaction volumes of domestic e-commerce companies were approximately 280 trillion won for Naver, 220 trillion won for Coupang, and 200 trillion won for eBay Korea. SSG.com, operated by Shinsegae, recorded 3.9 trillion won in transactions, which was even less than Lotte On, Lotte's online division, at 7.6 trillion won. If Shinsegae finalizes the acquisition of eBay Korea, combining the transaction volumes of SSG.com and eBay Korea would total about 240 trillion won, surpassing Coupang in scale and securing the second position after Naver.

The alliance between Emart and Naver began earlier this year when Vice Chairman Chung Yong-jin met with Global Investment Officer (GIO) Lee Hae-jin. While Naver is number one online but remains a simple intermediary platform in its shopping division, Emart is the strongest offline player but urgently needed to improve online accessibility amid the rapidly shifting retail market toward online. They joined hands out of mutual necessity. The retail industry has dubbed this the 'anti-Coupang alliance.'

Shinsegae and Naver exchanged shares worth 250 billion won and, within less than six months, jointly pursued the acquisition of eBay Korea, one of the big three in the domestic e-commerce market. This is the background behind the rebirth of Naver, Emart (SSG.com), and eBay Korea as the strongest alliance in the retail industry.

Coupang continues aggressive investments based on the massive funds raised from its IPO. It is currently pushing large-scale logistics center investments, including 100 billion won in Jeonbuk, 300 billion won in Gyeongnam, and 400 billion won in Chungbuk.

Post-Acquisition Strategy Will Determine Success

Naver has played a commerce platform role connecting small sellers and consumers through Smart Store while strengthening logistics and delivery by bringing in allies like CJ Logistics. Now, by combining Emart and eBay Korea’s 20 years of open market operation know-how and database, it is expected to enhance product competitiveness through Emart.

Emart also plans to strengthen its fresh food business, leveraging its existing strengths based on over 140 offline stores nationwide, and expects to secure customers and vendors simultaneously through eBay Korea for the open market business it has been promoting on SSG.com.

They also plan to introduce services through strategic partnerships with Naver, including attracting members from Naver Shopping and eBay Korea’s Smile membership, Naver grocery store listings, and combining Naver Pay with Shinsegae points.

However, concerns remain that without a long-term strategy, this could lead to a 'winner’s curse.' The acquisition price exceeding 400 billion won could become a burden for the additional investments needed post-acquisition.

An industry insider said, "Just as eBay Korea struggled to integrate platforms like Auction and Gmarket and operated them separately after acquisition, even if Shinsegae acquires eBay Korea, integrating existing businesses will not be easy. The relentless competition among e-commerce giants to seize market leadership will bring further changes to the retail market and serve as an opportunity to break down the boundaries between offline and online retail."