Ebay to sell South Korean unit for $ 3 billion because local rivals target Coupang

Ebay will sell its South Korean business to a local consortium for $ 3.1 billion, according to people familiar with the matter, as rivals want to turn on the heat of a Coupang-backed Coupang in the world’s fourth-largest e-commerce market.

South Korea’s largest brick-and-mortar retailer E-Mart and a consortium made up of the Naver Internet group plan to buy an 80 percent stake in eBay from Won3.5tn ($ 3.1 billion), while the U.S. company retains the rest. said the people.

Purchasing can help the consortium overcome rapid growth Coupang, Raised $ 4.6 billion in its initial public offering in New York in March to become South Korea’s most competitive e-commerce market. The Japanese technology group SoftBank is a big investor in Coupange.

Ebomon Korea was the third largest e-commerce company in the country with a 13 percent market last year, according to the Euromonitor research group. Its three platforms – Gmarket, Auction and G9 – were registered in Won20tn transactions last year, data from Meritz Securities showed.

Euromonitor predicts that South Korea’s e-commerce market will grow by 11 percent this year to $ 116 billion. But with a market share of more than a dozen players, Coupange and Naver control 19 percent and 14 percent of the shares in terms of transaction volume, respectively.

South Korea is one of the largest and largest e-commerce markets in the world, driven by its technological populations, high-speed Internet infrastructure, and densely populated areas. E-commerce accounted for 35.8 percent of the retail market last year, up from 28.6% in 2019, according to Euromonito data.

E-Mart plans to finance asset-backed loan deals with Won3tn, while the rest of the treasury pays, while Naver will help Won100bn, according to an industry official close to the state.

“Despite the funding structure, E-Mart needs Naver to form weak online networks,” the official said.

Conglomerate Lotte Group and E-Mart were the latest bidders for eBay Korea. Both have made efforts with Coupange, which makes significant investments in logistics to improve delivery times. Last year, Coupang nearly doubled its revenue to $ 12 billion as more consumers switched to online shopping during the Covid-19 pandemic.

“Lot and E-Mart were eager to take over eBay’s operations, but E-Mart offered more Won500bn,” the industry official added.

Naver is one of the most popular Internet portals in Korea and eBay accesses more than 40 percent of Korean customers through the former search engine.

Shinsegae, the parent company of E-Mars, and Naver, in March, partnered to exchange worthwhile stakes in Won250bn.

Ebay Korea declined to comment. E-Mart said in a regulatory filing that it was in talks with eBay but the sale was not over. Naver said in a separate file that the deal was not finalized.