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The entrance to eBay Inc.’s headquarters in San Jose, California, United States.
Bloomberg/David Paul Morris
Shinsegae, a South Korean retail powerhouse managed by a daughter of Samsung’s founder, has agreed to pay $3 billion for eBay’s Korean company in order to gain market share in the country’s highly competitive e-commerce industry.
E-Mart, a grocery branch of Shinsegae, will buy 80 percent of eBay Korea, according to a statement released by the American e-commerce site last week. According to the announcement, the agreement allows eBay Korea and E-Mart to create an ecosystem that sells everything from groceries to general products. The agreement will also increase E-same-day Mart’s delivery capability and the use of capacity at its warehouses for e-commerce goods.
As Korean e-commerce profits soar, Shinsegae is making its move. Korea’s e-commerce business has grown 250 percent since 2016, according to research firm Counterpoint. E-commerce revenues increased significantly as a result of an increase in online shopping during the Covid-19 pandemic. According to Counterpoint, the leading e-commerce companies in Korea by market share are internet giant Naver (16.5%), Coupang (13%), and eBay (12.4%).
“Because eBay Korea is the third-largest e-commerce firm in the South Korean market, the acquisition will instantly boost Shinsegae Group into a leading e-commerce market leader in South Korea,” says Rajiv Biswas, Asia-Pacific chief economist at research firm IHS Markit.
According to Mijung Kang, manager at Counterpoint, Naver leads due to the age and depth of its mass market internet services, which paved the door for it to enter e-commerce. Coupang gained traction in March with a $4.6 billion IPO in New York, the largest Asian IPO in the United States since Alibaba’s 2014 IPO.
ADDITIONAL INFORMATION FOR YOU
According to Dongkeun Yi, an analyst at Counterpoint, Shinsegae aims to collaborate with Naver and will invest more than $650 million in a fulfillment service center over the next four years. Lee Myung-hee, the youngest daughter of late Samsung Group founder Lee Byung-chull, is the chairwoman of the retail behemoth. Chung Yong-jin, Lee Myung-son, hee’s is the company’s vice chairman.
Shinsegae also stands out for its own cold chain, which refers to the temperature-controlled storage and shipment of products, according to Nyunsoo Na, an analyst with research firm IDC. “It appears that the corporation has a preference in (cold chain) based on their own offline channel and infrastructure,” Na explains. “They will be able to extend their cold chain sales with the help of eBay Korea IT engineers and members.”/nRead More

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