eBay Korea still looking for buyers?

Employees at eBay Korea pose for a picture in this 2016 file photo. / Korea Times file photo

By Kim Jae-heun

Despite the company's best-ever turnover in the first quarter of this year, there are still rumors that eBay Korea will be put to market for sale.

The company has been suffering from the rumor since last year when it became a limited liability company to free itself from filing an otherwise mandatory public report. Unlike a stock company, a limited liability company does not have to publically reveal its earnings or dividends paid so it can strategically control its sale price.

The company has obviously denied the rumor, calling it a groundless allegation.

However, the company revealed last year's revenue, which it had no obligation to do. An industry source said this can be seen as an act of expressing self-confidence and to respond to criticism that its estimated valuation of 5 trillion won is too high.

In 2019, eBay Korea recorded 1.09 trillion won sales from commission charges. Such a figure is a 12 percent increase from that of the previous year and its operating profit also soared by 27 percent to a record 61.5 billion won.

In the first quarter of this year, eBay Korea recorded a 4.23 trillion won turnover, but it was overshadowed by Coupang's revenue which skyrocketed to 4.84 trillion won, putting it in the top position.

An analyst Na Eun-chae of Korea Investment & Securities said to date the online retailer's growth rate of turnover only improved by three percent in as many months and it was passive in expanding its business, unlike Coupang.

“Coupang has aggressively expanded its business in the food and beverage sector while offering a direct deal between customers rather than connecting sellers on an open market, which made it possible for them to introduce overnight delivery orders,” Na said.

Last year, offline retail giants like Shinsegae and Lotte Shopping launched online businesses and they too have heralded major change and innovation. EBay Korea is the only player that does not want to take a risk and many believe this will bring ruin to the American retailor.

The country's No.1 search engine Naver's increasing influence on online shopping platforms is another critical factor that could drive eBay Korea into a corner. EBay Korea was once the largest open market platform ahead of G-Market and Auction up until few years ago, but Naver has taken over the top position.

Last year, Naver became the biggest shopping platform by volume of business, estimated at 20.92 trillion won. The search engine is a growing competitor for eBay Korea.

eBay Korea's headquarter in the United States too is having a hard time competing against Amazon and Walmart. It sold is subsidiary StubHub, an online ticket exchange and resale company, to improve sales performance last year.

“There is no dominant player in the local e-commerce market and if eBay Korea continues to depend on its stable management system, rumors of it selling the company will continue to swirl in the retail sector,” the source said.