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| As Kakao decides to participate in the eBay Korea takeover, competition in the e-commerce business with Naver is expected to intensify. /The Fact DB |
When Kakao acquires eBay, its e-commerce market share expands to 14%… Naver’s market share is 17%
[더팩트│최수진 기자] Naver and Kakao are facing each other in the shopping market following the search and content areas, which are their main business areas. Recently, it is known that Kakao is participating in the eBay Korea takeover, and e-commerce competition between the two companies is expected to become more intense.
◆ Kakao wants’eBay Korea’ to expand its shopping business in earnest
According to the industry on the 9th, Kakao participated in the acquisition of eBay Korea, which maintains the third largest market share in the domestic e-commerce market. The acquisition is expected to be Kakao Commerce, a subsidiary of Kakao. Kakao Commerce is in charge of businesses such as shopping for Kakao Talk and gifting.
In this regard, it is reported that Kakao Yeo Min-soo and a senior official at eBay Korea held a private business meeting recently.
Companies considering the acquisition of eBay Korea include not only Kakao, but also Shinsegae Group, Lotte Group, and Global Private Equity Fund including Coleberg Kravis Roberts (KKR). Among them, Kakao is regarded as a company with high potential for acquisition from the viewpoint of financing capacity.
Kakao’s cash holdings amount to 3 trillion won (as of 2020), and if 2.8% of treasury stocks (about 1.2 trillion won) are included, it will be able to raise KRW 4.2 trillion in cash. The acquisition of eBay Korea, which is estimated to be up to 5 trillion won, is also possible.
An official from Kakao said, “It is true that we are considering the acquisition of eBay Korea,” but “Nothing has been decided yet.”
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| When Kakao acquires eBay Korea, the e-commerce market share will expand to 14% at once. /Kakao Commerce website capture |
◆ Kakao, confronting Naver, No. 1 in e-commerce?
Kakao’s decision to participate in the acquisition is believed to have been affected by the increasing trend of online shopping after the outbreak of the novel coronavirus infection (Corona 19).
In fact, last year’s Talkbiz sales, including the Kakao commerce business, rose 63% over the same period of the previous year to KRW 360.3 billion, thanks to the growth of the overall commerce platform. Kakao Makers, operated by Kakao Commerce, exceeded the cumulative transaction amount of 300 billion won as of the end of last year.
In addition, since the e-commerce business can generate synergy with the existing business, it is possible to secure a new business model. Park Ji-won, a researcher at Kyobo Securities, said, “The e-commerce platform creates synergy with advertising, finance, and IP business in the long term.” “We will reinforce the barriers to entry that prevent people from entering the tech, advertising, and IP industries.”
Under such circumstances, if Kakao acquires eBay Korea, the annual transaction amount will grow rapidly from the existing 3 trillion won to 25 trillion won. Accordingly, competition with Naver is expected to become possible.
According to the securities industry, as of last year, Naver currently maintains the No. 1 market share in the e-commerce market. In the payment survey conducted by the market research company WiseApp, Naver recorded a payment amount of KRW 2.8 trillion (as of 2020), ranking first in the industry.
On the other hand, Kakao’s e-commerce market share is only 2%. If Kakao acquires eBay Korea, which has a 12% market share, it will raise its market share to the 14% level in a short period of time.
As a result, market expectations are high. Kim Hyun-yong, a researcher at Hyundai Motor Investment & Securities, said, “Kakao’s participation in the eBay Korea takeover is expected to have a significant impact on both Naver and Coupang Yanggang District.” It is possible to achieve a level comparable to that of Naver,” he analyzed.