Lotte and Shinsegae Interested in Acquiring eBay Korea

Lotte and Shinsegae Groups are interested in taking over eBay Korea.

Lotte and Shinsegae are expected to try to take over eBay Korea, the third-largest e-commerce company in South Korea. Both Lotte and Shinsegae can become the largest online shopping mall in South Korea once it acquires eBay Korea.

eBay Korea, which is running Gmarket and Auction, has remained in the black for 15 years whereas the other e-commerce firms in South Korea are in the red. Its annual transaction value is approximately 20 trillion won, the third-largest behind those of Naver and Coupang.

Lotte Shopping CEO Kang Hee-tae said at the company’s March 23 shareholder meeting that he is interested in eBay Korea. This has to do with the fact that Coupang successfully went public on the New York Stock Exchange and Shinsegae and Naver formed a partnership for a higher market share.

For Lotte Group, eBay Korea is an opportunity to boost Lotte ON, its sluggish e-commerce arm. Lotte ON, launched about a year ago, has failed to make any meaningful achievement. A change is inevitable and eBay Korea can serve as a breakthrough.

Shinsegae Group is interested in eBay Korea, too. The group is currently beefing up its e-commerce business based mainly on SSG.com. The e-commerce arm boosted its sales by 53 percent to 1,294.1 billion won last year. The company is preparing to expand its open market business and eBay Korea can be useful for the purpose.

eBay Korea is regarding itself as an enterprise with a value of five trillion won. As of the end of last year, Lotte Shopping’s cash and cash equivalents totaled 1,913.2 billion won, up 20 percent from a year ago. Those of emart, a subsidiary of Shinsegae, increased 63 percent to 1,113.2 billion won in 2020, when those of Shinsegae Corporation fell from 1,831.1 billion won to 1,663.7 billion won.

Both Lotte and Shinsegae are expected to be able to complete their financing without difficulties in that the current market liquidity is abundant. In addition, they can hold hands with external investors. In other words, the result is likely to depend on which is more willing to acquire eBay Korea.