Lotte, Shinsegae eye June mega-bids for online market dominance

By Yi Whan-woo

Retail giants Lotte and Shinsegae may be most willing to acquire the country's third-largest e-commerce firm eBay Korea in a bidding process beginning in June, as a successful acquisition can push them to become the dominant market player, according to industry sources, Monday.

While Lotte and Shinsegae retain their dominance in the offline market, their respective e-commerce arms ― Lotte ON and SSG.com ― have been falling behind online against startups-turned-chaebol Naver and Coupang.

Launched in 2020, Lotte ON has failed to beef up the conglomerate's presence on the online market. EBay Korea is anticipated to serve as a breakthrough.

Regarding Shinsegae, sales of SSG.com went up by 53 percent last year and the company seeks to bolster its open market business.

The bidding process for eBay Korea will begin on June 7, with Lotte, Shinsegae, SK Telecom and MBK Partners being preferential bidders.

“And considering the first two preferential bidders' main business is retail, they may be more aggressive than the two latter in bidding,” a source said.

SK Telecom is the wireless telecommunications operator under SK Group. MBK Partners is a private equity firm.

EBay Korea has an annual transaction value of approximately 20 trillion won ($17.9 billion), which accounts for 12 percent of the market share followed by Naver with 17 percent and Coupang with 13 percent.

The appropriate bid price for eBay Korea is expected to be in the range of 3 trillion won and 5 trillion won.

Lotte and Shinsegae are expected to be able to complete their financing without difficulties due to their abundant market liquidity currently.

“But it is also possible they may join hands with external investors,” a source said.

Some sources viewed Lotte and Shinsegae may go for an acquisition of Yogiyo, a popular food delivery platform that will also go up for sale in June.

Yogiyo's value is estimated to be in the range of 1 trillion won and 2 trillion won.

Currently Lotte and Shinsegae have no shares in the food delivery app market.

Baemin is the country's No. 1 player with a 63.2 percent market share, followed by Yogiyo with 29 percent and Coupang Eats with 6.3 percent.