Signage for eBay Inc. at the entrance of the company's San Jose headquarters, California, U.S. David Paul Morris/BloombergShinsegae South Korean retail giant, which is led by a daughter from Samsung's founder, has agreed that eBays Korean business will be acquired for $3 billion. This move will help the company gain market share in South Korea's increasingly competitive ecommerce market.E-Mart, Shinsegaes' supermarket affiliate, will purchase 80% of eBay Korea, according to the U.S. e-commerce website. This was announced last week in a statement. According to the statement, this deal will allow eBay Korea and E-Mart create an ecosystem that sells everything, from groceries to general merchandise. E-Mart's same-day delivery capabilities will be enhanced and capacity at its warehouses will be better utilized for goods that can be shipped via e-commerce.Shinsegae is making a move as Korean ecommerce revenues rise. Counterpoint research shows that Korea's ecommerce market has grown 250% in the past year. E-commerce revenues grew globally due to an increase in online shopping during and after the Covid-19 pandemic. According to Counterpoint, the top three e-commerce companies are Naver (16.5%), Coupang (13%), and eBay (12.4%).According to Rajiv Biswas (Asia-Pacific chief economist at research firm IHS Markit), eBay Korea is the third-largest e-commerce company in South Korea. The acquisition will instantly make Shinsegae Group a leader in South Korean e-commerce, says Rajiv Biswas.Counterpoint manager Mijung Kang says Naver's leading position is due to the depth and age of its mass-market internet services, which paved its way into ecommerce. Coupang won ground with a $4.6 million initial public offering in New York in March, which was the largest U.S. listing for any Asian company since Alibaba's 2014 IPO.According to Counterpoint analyst Dongkeun Yi who is a Counterpoint analyst, Shinsegae plans to work with Naver and will invest more $650 million in fulfillment services centers over the next four-years. Chairwoman Lee Myunghee, youngest daughter of Lee Byung-chull, is leading the retail giant. Vice chair of the company is Chung Yong Jin, Lee Myung-hees billionaire son.Shinsegae is also distinguished for its own cold chains, according to Nyunsoo Na (an analyst at research firm IDC). This refers to temperature-controlled storage and shipping products. Na states that the company seems to have a preference for cold chain based on its own offline channels and infrastructure. They will be able expand their cold-chain sales with the help of eBay Korea IT members and engineers.
