Showdown between Naver, eBay begins

eBay’s removal of database from Naver’s shopping section intensifies competition

EBay Inc., the world’s largest online marketplace operator, is seeking to remove its database from the shopping section of Korea’s top portal site Naver, amid an intensifying rivalry over the nation’s rapidly expanding online shopping market.

EBay, which currently owns the biggest e-commerce websites Auction and Gmarket, delivered an official request last week to Naver, asking it not to feature the details of the company’s items on the shopping section dubbed “Knowledge Shopping.”

The California-based firm also called on Naver to return the past database of the company’s products by this week. Under the steps the products of Auction and Gmarket sellers will not be sold through Naver.

Naver is said to be preparing to soon jump into the “open market” ― a market widely accessible to all consumers or investors, according to industry sources.

The competition is spicing up in the nation’s electronic commerce market, which is growing through the introduction of smart devices, such as smartphones and tablet PCs.

But eBay officials said the removal of product database from Naver was due to the commission charged by the local search engine.

“We’re taking such action only as a means of negotiating the high commissions Naver has been charging, and it has no big connections to making a diversion against Naver’s Knowledge Shopping,” said an eBay official.

Auction and Gmarket have been paying Naver a commission of 2 percent of the selling price for items sold through its shopping section.

In response, Naver said that the high commission was not the decision-making factor for eBay’s reclaiming of the database.

“We believe it is a move designed to build a fence against Knowledge Shopping,” said a Naver official.

The official added that eBay actually renewed its contract until next month to be listed on Naver’s Shopping Cast, which features the hottest items selling online either by the name of the e-commerce operator or by the product.

“The commission for the enlistment of Shopping Cast turns out to be higher than 2 percent, which indicates (eBay’s) side of the story isn’t convincing,” he said.

“We would say designed to prevent the growth of Knowledge Shopping for eBay is the dominant player in Korea in terms of market share with its merger the nation’s top two players in the e-commerce market.”

In 2009, eBay acquired online auction site Gmarket Inc. for about $1.2 billion to expand its presence in Korea.

By Cho Ji-hyun (sharon@heraldcorp.com)