What are SKT's intentions in bidding for eBay?

By Kim Bo-eun

The participation of SK Telecom (SKT) in the preliminary bid to acquire eBay Korea came as a surprise as it was not on the list of entities expected to take part in the race.

Unlike other entities that refrained from speaking out about their participation in the bid, SKT explicitly stated it would take part. This raised speculations that the telecom carrier, with a diverse array of businesses under its arm, was determined to acquire the U.S. e-commerce giant's local unit.

However, it has become unclear what SKT's intentions are at a time when its e-commerce platform 11Street is boosting collaboration with Amazon. In addition, SKT CEO Park Jung-ho, who said earlier that the company would take part in the preliminary bid for eBay, did not make clear comments about his intentions to acquire the platform at a general shareholders' meeting held in late March.

Lee Sang-ho, who heads 11Street, instead spoke about plans to innovate the online shopping experience for customers by improving processes for which they purchase items on Amazon via 11Steeet's platform.

Initially it seemed to be in the interests of SKT to acquire eBay. The company has sought to scale up its commerce business as part of efforts to reduce reliance on its conventional telecom operations. SKT's commerce business is on a growth trajectory, posting its first operating profit in the fourth quarter of last year amid the surge in online shopping.

The market share of 11Street is about 6 percent in the local e-commerce market. Meanwhile, eBay Korea takes up about 12 percent in transactions, ranking it third after Naver with a 17 percent market share and Coupang with 14 percent. If SKT acquires eBay, it could become the No. 1 player in the e-commerce market.

But the costs of acquiring eBay may have posed a burden for SKT ― the local unit's worth is known to have been disclosed as 5 trillion won.

An industry official said, "It would not hurt SKT to take part in the bid even if it isn't aiming for the acquisition because it could get to examine eBay, a rival firm, in the process."

Other players in the bid ― Lotte Group, Shinsegae Group and private equity firm MBK Partners ― have affirmed their interest in the company.

Lotte Shopping CEO Kang Hee-tae said at the firm's general shareholders' meeting in March that Lotte is "sufficiently" interested. Shinsegae Group's discount retailer E-mart's CEO Kang Heui-seok also said at the company's shareholders' meeting last week that it is "seriously looking into acquiring eBay Korea."