Lotte close to decision on purchasing eBay

Lotte Group Chairman Shin Dong-bin talks to his executives during a company meeting at his office in Seoul on Jan. 14. Courtesy of Lotte Group

By Kim Jae-heun

Lotte Group is expected to decide soon whether to take over eBay Korea to beef up its sluggish e-commerce operations. Expectations are rising, with Chairman Shin Dong-bin returning to work after a quarantine period in Seoul, following his trip to Japan two weeks ago.

There are only two months left until the online retail platform selects its preferred bidders. The bid price offered by Lotte is expected to show just how much Shin wants eBay Korea, according to industry watchers.

“Chairman Shin has been receiving business reports starting this week, and he is discussing various items on the agenda, including the acquisition of eBay Korea. We have different opinions on the case internally, and we will have to see what the outcome turns out to be,” a Lotte Group official said.

The consensus view within Lotte Group is that the acquisition of eBay Korea is the best option to improve the food and retail conglomerate's lackluster online shopping business.

Its combined online shopping platform, Lotte ON, has a gross merchandise value (GMV) of 7 trillion won, which is too small to compete against the top two players, Coupang and Naver, whose GMV stands at around 24 trillion won.

The problems are the price Lotte will have to pay to acquire eBay Korea, as well as the uncertainty of the latter's synergy with Lotte ON.

Lotte has already spent over a trillion won to launch Lotte ON. Also, eBay Korea's price is estimated at between 5 to 6 trillion won.

Others question the effectiveness of acquiring eBay Korea in helping Lotte ON rise to the top position in the domestic e-commerce market.

Shin will be flying back to Japan to participate in the general meeting of the shareholders of Lotte Holdings at the end of June. This schedule means that the chairman has a month and half to review whether to acquire eBay Korea.