[넘버스]Shinsegae and Lotte, who can confront Coupang

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A great deal of attention was focused on the preliminary bidding for the sale of eBay Korea, which ended at 6 pm on the 16th. This is because it is an important deal that may overturn the domestic’e-commerce’ market depending on who acquires it. Moreover, immediately after Coupang was listed on the New York Stock Exchange, its market capitalization exceeded 100 trillion and the e-commerce market itself heated up. There were also observations that Kakao and Naver would participate, but in the end, the 4th wave of Shinsegae, Lotte, SKT, and MBK Partners unfolded.

Of the four candidates for acquisition, Shinsegae and Lotte attract attention because they are a competition between traditional retail dinosaurs. Both companies are making life and death investments to turn the dominance of the offline distribution market online. If one of the two companies has eBay Korea, it is highly likely that the balance of power that has remained similarly similar will be broken at once.

‘It’s not the share that matters’

The reason eBay Korea is attracting attention is its market power. According to the Kyobo Securities report, the market share of eBay Korea, which has auctions and Gmarkets, was 12% last year. It is the third largest company in the market after Naver 17% and Coupang 13%. Anyone who acquires eBay Korea can reverse the game based on transaction value.

However, some point out that the current share is not that important. The thing to watch out for is that it’s not the current trading volume, but the trend from the past to the present. In fact, open market companies have continued to decline since the advent of Coupang.

You can think of the open market as a marketplace that connects many sellers and consumers online. Coupang is also based on the open market business model, but it is clearly differentiated from general open market operators in that it purchases, stores, and even ships products directly. Coupang is equipped with a’full-filment service’ that applies new IT and logistics technologies to enable’next-day delivery’. For similar product categories and similar prices, consumers would prefer fast delivery. Coupang’s increased market share can be seen as a result of eroding the share of other open market operators.

In 2016 alone, eBay Korea’s market share in terms of transaction volume was No. 1 with 18%. Second place was 11th Street, with 10% of the market share. But in 2020, four years later, eBay Korea fell to third place. 11th Street fell to fourth place. The market share also fell by 6% and 4%, respectively.

Let’s look at the trends in the number of orders from major e-commerce companies internally compiled by a domestic retailer. Previously, Kyobo Securities’ statistics were based on the volume of transactions. This statistic shows how many orders were made through the platform, regardless of the transaction amount.

First of all, looking at the trend of the number of orders over the last three years, the result is quite noticeable, which is different from the transaction amount. Coupang beat Naver and is ranked first in the industry. Until 2019, the number of orders received by Coupang was 430,000, which was behind Naver’s 460,000. In 2020, the order volume increased significantly to 670,000 cases, and Naver 600,000 cases were outpaced by a large gap. From this result alone, it is possible to infer that consumers buy expensive products from Naver through comparative search, and that everyday consumer products that are relatively inexpensive are purchased from Coupang.

Another thing to note is the negative growth or stagnant growth of other open market companies. In fact, Coupang and Naver are the only companies that have increased the number of orders over the past three years. The number of eBay Korea orders last year was 340,000, down 20,000 from the previous year’s 360,000. 11th Street recorded 210,000 cases, an increase from the previous year, but this is a decrease compared to 250,000 cases in 2018. WeMef has a clear negative growth trend from 190,000 to 160,000 and 140,000. Timon’s orders were stagnant at the level of 100,000.

Key to Maximizing Synergy with eBay Korea

As a result, there are concerns in the industry that the market power of eBay Korea should not be fooled by fantasy. It is because it holds the third position in the market right now, but considering the growth of Coupang and Naver, there is a high possibility that the market will be stolen even if left alone.

In the end, the key is’how to create synergy’. Since it is still in the preliminary bidding stage, it is not known whether Shinsegae and Lotte will complete the race until the end, but we can expect synergy under the assumption that they will take over.

First of all, if Shinsegae acquires eBay Korea, it is possible to diversify its products. Almost all goods are distributed outside of the existing fresh food-oriented operation. As a result, some have come up with an evaluation that it is like an all-out war against Coupang.

It is also positive that Shinsegae is making large-scale investments in expanding the logistics automation center NEO. We already have a large number of offline stores nationwide, and there is a lot of room to replace orders received from eBay Korea with fast delivery by adding distribution centers.

Like Shinsegae, Lotte can expand its open market business if it acquires eBay Korea. However, in terms of logistics infrastructure, it is evaluated as being less competitive. The online platform’Lotteon’, launched by the Lotte Group last year, is nothing more than a collection of the group’s seven distribution affiliate platforms. It is not a new corporation like SSG.com. The logistics service is not operated in an integrated manner, but is operated by each of the seven companies separately. If eBay Korea is acquired, it is analyzed that large-scale investments in distribution centers are inevitable.

However, there are opinions that it is not easy for both companies to acquire eBay Korea to create synergy. Shinsegae is making large-scale investments in distribution centers, but it is already too difficult to digest SSG.com and Naver.

Park Jong-dae, a senior analyst at Hana Financial Investment, said, “Lotte is already highly competitive in the e-commerce market, and the additional distribution center cost burden is considerable.” Will”.

In the industry, the preliminary bidding is just a war of noticing, and there are also observations that no business operator actually wants to take over. Even if the acquisition is successful, the business may fail. Who will be in the arms of eBay Korea in the end? Who can stand up to Coupang?