Shinsegae South Korean retail giant, led by the daughter of Samsung’sSamsung’s founder, has agreed to buy eBay’seBay’s Korean business. This move will help it gain market share in South Korea’sKorea’s increasingly competitive online market.
E-Mart, Shinsegae’sShinsegae’s supermarket affiliate, will purchase 80% of eBay Korea, according to the U.S. e-commerce website. According to the statement, the deal will allow eBay Korea and E-Mart to create an ecosystem that sells everything, from groceries to general merchandise. In addition, E-Mart will be able to offer same-day delivery and increase the capacity of its warehouses to ship goods via e-commerce.
Shinsegae is making a move as Korean ecommerce revenues rise. Counterpoint research shows that Korea’sKorea’s ecommerce market has grown 250% in the past year. In addition, E-commerce revenues grew globally due to an increase in online shopping during and after the Covid-19 pandemic. According to Counterpoint, the top three e-commerce companies are Naver (16.5%), Coupang (13%), and eBay (12.4%).
Rajiv Biswas (Asia-Pacific chief economist at research firm IHS Markit) stated that eBay Korea was the third-largest e-commerce company in South Korea. The acquisition will instantly propel Shinsegae Group to become a top e-commerce market leader.
Counterpoint manager Mijung Kang says Naver’sNaver’s leading position is due to the depth and age of its mass-market internet services, which paved its way into ecommerce. In addition, Coupang gained ground with a $4.6 million initial public offering in New York in March, which was the most extensive U.S. listing for any Asian company since Alibaba’sAlibaba’s 2014 IPO.
According to Counterpoint analyst Dongkeun Yi, a Counterpoint analyst, Shinsegae plans to work with Naver and invest more than $650 million in fulfillment services centers over the next four years. Chairwoman Lee Myunghee, the youngest daughter of Lee Byung-chull, is leading the retail giant. The vice-chair of the company is Chung Yong Jin, Lee Myung-hee’sMyung-hee’s billionaire son.
Nyunsoo Na from research firm IDC says Shinsegae is also notable for its cold chains. This refers to temperature-controlled shipping and storage of products. Na states that ” based on their offline channels and infrastructure, it seems like the company has a preference in (cold chains).” They will be able to expand their cold-chain sales with the help of IT members and engineers from eBay Korea.