Large e-commerce market with 150 trillion won… Who occupies an empty spot on eBay

EBay Korea, which operates an auction with Gmarket, recently held an employee meeting and decided to sell it. This is just after eBay’s US headquarters announced its intention to sell its Korean business on the 19th. An official from eBay Korea said on the 24th, “We came up with a concrete statement at the executives meeting that the sale would take about 6 months to 1 year.”

The online shopping (e-commerce) market is fluctuating. The domestic market, which was worth 135 trillion won in 2019, seems to have easily exceeded 150 trillion won last year. Although the impact of the novel coronavirus infection (Corona 19) is also large, it is because competition among native companies has intensified. Social commerce companies such as Coupang, as well as existing distribution giants such as Lotte and Shinsegae, and information technology (IT) companies such as Naver, ignited the competition. In addition, 11th Street of SK Group, the third largest business in the business world, also joined hands with Amazon, the world’s largest e-commerce company. The spring and autumn nationwide era was opened in the online shopping market.

This situation was also taken into account when eBay announced its intention to withdraw from the Korean market. The market share, which once occupied about 70% of the domestic online shopping market, has recently dropped to the beginning of 10%. It is reminiscent of Wal-Mart in the US and Carrefour in France, which left Korea at the same time in 2006 due to the indigenous distribution companies.

Coupang, a symbol of native social commerce, played a major role in eBay’s departure. According to WiseApp, an app and retail analysis company, Coupang’s transaction amount reached 22 trillion won last year. It has increased by more than 40% from 2019. Coupang is promoting listing on NASDAQ this year. In the market, Coupang’s corporate value is expected to reach 30 billion dollars (about 32 trillion won). Once listed, Coupang can receive a large amount of money again. Coupang’s largest shareholder, Softbank, can make another large-scale investment without the help of Son Jeong.

Timondo has grown remarkably in recent years with a new business model called’time commerce’. It is a kind of special exhibition that offers discounts on various products by time. Consumers have no choice but to look at the Tmon app from time to time. According to Nielsen KoreanClick, it ranked first in the e-commerce industry for two weeks in a row in terms of average dwell time in January this year.

Large distribution companies like Lotte and Shinsegae also dream of recovering their lost pride. In particular, Shinsegae E-Mart’s SSG.com is making good progress. On-offline connection using existing offline networks is active. Starbucks online shop is also attracting attention. Thanks to this, the annual transaction amount, which was less than 3 trillion won in 2019, is estimated to exceed 4 trillion won last year. Lee Ji-young, a researcher at NH Investment & Securities, predicted that the value of E-Mart will be re-evaluated thanks to SSG.com.

Lotte, which declares an emergency situation and tightens its belt, is a string of hope with’Lotteon’, which started in April last year. Little by little, results come out. Lotte On’s sales in the past month increased by 130% compared to the initial launch. The number of sellers (merchandisers) that entered Lotte On also doubled. But there is still a long way to go. Lotte Group chairman Shin Dong-bin was criticized at the New Year’s presidential meeting. Lotte On plans to expand its territory by introducing groceries this year. The goal is to increase the number of sellers by more than double.

The real strong is Naver, equipped with both technology and capital. It has actively expanded the smart store, a C2C (consumer-to-consumer) open market. Simple payment through Naver Pay is also a powerful weapon. Moreover, joining hands with CJ Logistics, the No. 1 logistics industry through stock exchange, is enough to tense the industry. Since the third quarter of last year, Naver has separately disclosed the e-commerce sector separately from its financial statements. In the third quarter of last year alone, it generated nearly 300 billion won in operating profit through e-commerce.

Smart stores do not have a commission concept, unlike e-commerce companies that receive a portion of their sales as commission. Instead, Naver makes profits through payment fees and price comparisons. From a seller’s point of view, Naver has the least fee burden. A Naver official said, “This year, we plan to upgrade the store with live broadcasting in real time.”

Kakao is still small compared to Naver. As of 2019, Kakao’s e-commerce transaction amount was 3 trillion won. It is shabby compared to Naver, which is estimated at 20 trillion won. However, most of Kakao’s sales are generated through’giving gifts’ in the form of electronic coupons. Therefore, unlike other e-commerce companies, there is no separate logistics cost. In addition to this, Kakao plans to increase the range of gifts such as luxury goods. It is a scheme to expand the users of the gift-giving service concentrated on the younger generation to the middle-aged.

An official in the distribution industry who wanted to remain anonymous said, “As of the close of the 22nd, Lotte Shopping’s market capitalization is 3,281.5 billion won and E-Mart is 4.85 trillion won, whereas Coupang is recognized for its corporate value of 32 trillion won.” As the scale of the company continues to grow, competition will become fiercer, and many companies will be cut off in the process,” he predicted.

Reporter Lee Soo-ki [email protected]