EBay’s US Headquarters “Search for Strategic Alternatives to Korean Business”
The rumored sale of the rumors rises to the surface
The key is the ransom… Pushed by MAU and Membership Coupang
Lotte Private Equity Funds Are Talked About “Acquisition Difficulty Expected”
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As eBay’s US headquarters officially announced the sale of eBay Korea, the industry is drawing attention as to who will become the new owner of a mega e-commerce (e-commerce) company with an annual transaction volume of 19 trillion won. If eBay Korea is acquired, it can be ranked at the top of the domestic e-commerce industry at once, but considering the future value and growth potential, the biggest concern is whether the sale can proceed smoothly despite a high ransom of 5 trillion won.
On the 19th (local time), eBay’s US headquarters announced on its official website that “the process of seeking, reviewing, and exploring a wide range of strategic alternatives to Korean business has begun.” “We are considering options (including sale) to maximize value for our shareholders and create future business growth opportunities.” The rumors of the sale of eBay Korea became true.
Candidates for acquisition include large domestic retail companies such as Lotte and Hyundai Department Store, as well as private equity funds (PEF) such as Coleberg Kravis Roberts (KKR).
The problem is the ransom. According to the industry, eBay is known to have offered 5 trillion won for the sale of eBay Korea, but it is because of the evaluation that 5 trillion won is high considering the domestic market situation where it is difficult to secure the future growth potential of eBay Korea. According to Mobile Index, the number of monthly users of Gmarket and Auction (MAU, Android OS + iOS combined) as of December last year was 6.87 million and 3.13 million, respectively, for a total of 9.21 million. This is a decrease of about 10% from 10.08 million in May of last year, and only 43% of Coupang’s MAU of 21.41 million last month. The operating margin also reached 20% in 2010, but fell to 5.7% in 2019.
It is an analysis that the paid membership strategy, which was attempted at least in the domestic e-commerce industry, did not have much effect. EBay Korea introduced’Smile Club’ in April 2017, but currently it has only about 3 million subscribers. Coupang’s’Rocket Wow’ subscribers are estimated to be about 5 million, and Naver’s’Naver Plus Membership’ also had limited influence in the market compared to its 2.5 million mark in six months of launch, according to the industry.
An industry insider explained, “There are few companies in Korea that will spend 5 trillion won to acquire eBay Korea,” and said, “If it is about 2 trillion won, there may be some, but even this will be difficult unless it is a foreign investor.” He added, “It is unlikely that most of the domestic distribution companies will be able to take over eBay Korea because they are already working hard to increase their platform competitiveness.”
/ Reporter Juwon Baek [email protected]
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