Coupang-Triggered Major Shift... eBay Korea Acquisition Battle Expands

Shinsegae Followed by SK Telecom's Entry
SKT's Final Deliberation Leads to Strong Platform Building Opportunity
If Acquired, 11st Jumps to 'Big 3' Market Share
SSG.com Shinsegae Group's Transaction Volume Could Soar to 24 Trillion Won
Lotte Group Also Considers Acquisition as Online Strategy
Kakao Expands Open Market Area Against Naver Shopping
Trillion-Won Acquisition Cost a Hurdle...Some Fear 'Winner's Curse'

[Asia Economy Reporters Seulgina Jo, Yuri Kim] "This is not just a simple acquisition battle but a 'lifeline grab' by market participants aiming to become the ultimate winner in the e-commerce arena where a tectonic shift has begun."

The eBay Korea acquisition battle is heating up. Initially, a two-way contest between Lotte and Kakao was expected due to the acquisition price hope of around 5 trillion won, the business structure dominated by open markets, and low growth potential. However, after Shinsegae showed interest, SK Telecom officially declared its participation in the acquisition at the last minute. Coupang’s aggressive moves, following its successful large-scale fundraising through its New York Stock Exchange listing, had already been a concern, and the prospect of another competitor expanding by acquiring eBay Korea adds further pressure on each company. This is why the leading acquisition candidates have taken a 'participate first' stance in the bidding.

◆ Park Jung-ho Dreaming of a 'Korean Amazon'

Park Jung-ho, Chief Executive Officer (CEO), along with SK Telecom’s management, after much deliberation, decided to participate in the preliminary bidding for the sale of eBay Korea, which closes on the 16th. It is known that they judged this as a golden opportunity to enhance the competitiveness of their subsidiary 11st and build a powerful platform by linking SK Telecom’s ICT capabilities.

11st, which holds about a 6% share of the domestic e-commerce market, has long been considered SK Telecom’s weak spot and has been repeatedly rumored to be up for sale. However, CEO Park, who has been advocating for a post-telecom strategy, has consistently drawn a line against selling 11st, focusing instead on the growth potential in commerce and the possibility of platform expansion linked to ICT capabilities such as artificial intelligence (AI). The judgment is that 11st can grow into a 'global platform' and leap forward as the Korean version of Amazon. Commerce is considered a core part of SK Telecom’s post-telecom strategy alongside security, mobility, and media.

The big deal with Amazon, formalized last November, was essentially the starting point for this roadmap. Since announcing a long-term collaboration plan centered on 11st, SK Telecom has actively partnered with domestic e-commerce players like SSG.com to eliminate service blind spots.

Moreover, if SK Telecom acquires eBay Korea, 11st, which had lagged behind in domestic e-commerce market share, will instantly rise to become one of the big three. eBay Korea’s delivery capabilities, such as Smile Delivery operated jointly with CJ Logistics, will also significantly strengthen 11st’s delivery capacity, which had been a weak point in the open market.

The emergence of new platform powerhouses in commerce based on recent ICT competitiveness, such as Coupang, which was valued at 100 trillion won in the New York Stock Exchange, and Naver, which is strengthening its commerce capabilities, has also influenced this move. An industry insider said, "With Coupang’s successful large-scale fundraising through its NYSE listing, scale competition has become inevitable in the survival battle of the e-commerce industry. For SK Telecom, which is preparing for 11st’s initial public offering (IPO), a winning move to boost corporate value was necessary."

◆ The Acquisition Battle Ignites

Major distribution conglomerates and other IT giants are also accelerating their steps. Shinsegae Group has selected an acquisition advisory firm and started reviewing the investment memorandum (IM) previously received from eBay Korea. Shinsegae is expected to undergo a corporate value adjustment verification process through the preliminary bidding. Shinsegae, which had been preparing to enter the open market through its integrated online mall SSG.com, can rapidly expand its scale by acquiring eBay. Considering last year’s SSG.com transaction volume of 3.9 trillion won, the acquisition would make it a top-tier player with a scale of 24 trillion won, second only to Naver. Industry insiders also speculate that Shinsegae might partner with Affinity Equity Partners and BlueRun Ventures (BRV), who invested 700 billion won in SSG.com in 2019 and formed a partnership with Shinsegae.

Lotte Group is considering acquiring eBay Korea as one of the ways to overcome the sluggish performance of its integrated online mall Lotte On. Following the resignation last month of Cho Young-je, head of Lotte Shopping’s e-commerce division (CEO), who took responsibility for the business downturn, Lotte faces the need for a major rebuilding of Lotte On along with appointing a successor. If Lotte acquires eBay Korea, it will rapidly rise to a scale of 27.6 trillion won in transaction volume, surpassing Naver Shopping.

Kakao is also highly likely to pursue acquisition given the large gap with its rival Naver in the online shopping sector. Kakao, which achieved over 3 trillion won in transaction volume with its flagship business 'KakaoTalk Gift' and recorded double-digit operating profit margins, would expand into the open market through the acquisition, growing its annual transaction volume to about 25 trillion won. MBK Partners, a management participation private equity fund (PEF) and major shareholder of Homeplus, is also reportedly considering both solo participation and consortium formation.

However, the high acquisition price, reaching several trillion won, remains an obstacle. The financial investment industry expects the sale price to be decided around 4 trillion won, about 1 trillion won lower than eBay Korea’s hoped acquisition price of 5 trillion won. An industry insider said, "The market is rapidly changing, so no one can afford to lose interest entirely. When considering the acquisition price, concerns about the 'winner’s curse' cannot be ignored. Each company’s deliberations will continue until the final bidding."

This content was produced with the assistance of AI translation services.