Lotte 'Innovation' vs Emart 'Strategy' ... Intense Battle for eBay Korea Acquisition

Lotte Appoints CEO Dongwoo Lee for M&A Oversight
Emart Steps Up with Strategic Planning Division
Retail Industry: "Lotte, Feeling Greater Crisis, Likely to Take More Aggressive Action"

[Asia Economy Reporter Jo In-kyung] Retail rivals Lotte and Emart have clashed in the bidding war to acquire eBay Korea. Initially, when the asset was put up for sale, the two companies seemed to show little interest, but they have since mobilized financial experts and strategists at the group level to devise acquisition strategies.

Lotte has assigned Lee Dong-woo, CEO of Lotte Holdings who oversees mergers and acquisitions (M&A) at the group level, along with the Management Innovation Office to handle the acquisition process. Emart’s CEO Kang Hee-seok is personally leading the Strategic Planning Headquarters to deliberate on the bidding strategy.

Lotte Leads Through Management Innovation Office

Amid Vice Chairman Kang Hee-tae of Lotte Group expressing "considerable interest" in acquiring eBay Korea, Lotte Group deployed Lee Dong-woo, CEO of Lotte Holdings, to the bidding. Lee, who oversees the group’s M&A business, is a retail expert with experience at department stores and Lotte Himart. The former ‘Management Strategy Office’ was renamed the ‘Management Innovation Office’ and now focuses on investment tasks such as discovering new businesses and M&A.

Lee Hun-ki, head of the Management Innovation Office (Vice President), is an expert in strategy and planning who previously served as CEO of Lotte Rental and head of planning at Lotte Chemical. After the dismissal of Jo Young-je, who led Lotte Shopping’s e-commerce business, Lee took over related duties. The preliminary bidding for eBay Korea, as well as recent group-level decisions to enter the bio industry and participate as a financial investor in the acquisition of Junggonara, were all decided by the Management Innovation Office. Lotte Group has shown its determination to revamp its sluggish retail business through this eBay Korea acquisition.

Emart Entrusts Strategic Planning Headquarters

Under the leadership of CEO Kang Hee-seok, Emart is carefully reviewing the acquisition of eBay Korea centered on the Strategic Planning Headquarters. Shin Dong-woo, who was promoted to executive director last year, is in charge of the practical work. Shin, a former consultant, is known within Emart as a strategist who has consistently planned the company’s long-term plans.

Emart internally views eBay Korea as an attractive asset. It appears they are also considering synergies with SSG.com, which is preparing to transition to an open market. CEO Kang Hee-seok confirmed this intention at the shareholders’ meeting the day before, stating, "We are seriously considering the acquisition of eBay Korea." While reviewing investment efficiency, they are willing to invest boldly in business opportunities with growth potential.

Retail Industry: "Lotte Is More Urgent"

The retail industry expects Lotte Group to pursue the acquisition of eBay Korea more aggressively, driven by a strong sense of crisis that "if they do not seek new innovation now, they could fall completely behind." Lotte’s entry into the previously taboo secondhand market by acquiring shares in Junggonara is also interpreted as reflecting this sense of urgency.

An industry insider said, "From Lotte’s perspective, the bold moves by competitor Emart, such as acquiring a baseball team and forming an alliance with Naver, must have been a significant stimulus. Lotte itself needs to show gestures of change, which is why it seems to be actively interested in every asset that comes up in the M&A market."

On the 23rd, Kang Hee-tae, Vice Chairman and CEO of Lotte Shopping, emphasized ‘innovation’ before shareholders, saying, "We will not merely strengthen digital capabilities in response to the rapidly changing era. We will achieve business innovation based on digital transformation across the entire business."

The Key Is the Appropriate Acquisition Price

For both Lotte and Emart, the key in the eBay Korea acquisition battle is the appropriate ‘purchase price.’ Currently, both sides’ working-level teams estimate the fair price of eBay Korea to be below 4 trillion won. However, the selling agents expect a price range between 4 trillion and 5 trillion won, creating a price gap. Considering the open market nature, where many sellers on eBay Korea also operate on competitors like Naver and 11st, and the high valuations of e-commerce companies following Coupang’s listing, some believe the expected sale price is excessively high.

An e-commerce industry official said, "The two large retail conglomerates, which own many offline stores and assets, likely do not have concerns about raising acquisition funds. However, since Coupang’s successful U.S. stock market listing has led to an overvaluation of eBay Korea, they will need to carefully crunch the numbers until the very end."

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