Speculation over eBay’s sale of Korean unit grows amid appointment of new local CEO

EBay Korea appointed Chun Hang-il as its new chief executive officer on Wednesday, amid growing speculation that the US e-commerce firm is poised to sell its business interests in South Korea.

Chun, who previously led the Japanese unit of eBay, will take over from outgoing CEO Byun Kwang-yun from Thursday.

The leadership shakeup comes a day after the online retail giant announced it was looking at “alternatives for its Korea business” amid growing competition from the likes of Coupang and Naver Shopping, prompting reports that the e-commerce giant’s days in the country are numbered.

EBay Korea owns major e-commerce giants in Korea including Gmarket, Auction and G9, boasting a combined market share of 12 percent to 14 percent, based on analysis of 2019 data from Statistics Korea.

Given its size, the sale is likely to restructure the country’s e-commerce market -- the fifth-biggest in the world by sales, according to 2019 data from eMarketer.

In a statement Wednesday, eBay said it has “initiated a process to explore, review, and evaluate a range of strategic alternatives for its Korea business” and is “considering options that would maximize value for its shareholders and create future growth opportunities for the business.”

The company, however, refrained from making further public announcements regarding the strategic review “unless and until the board has approved a course of action requiring disclosure.”

One eBay Korea official said the local unit was told that news related to its Korean business was on its way Saturday, before Wednesday’s announcement.

“Based on the statement, there seems to be a will to sell,” the official added.

In 2019, the Korean unit racked up over 1.95 trillion won in sales, which it said was a record-breaking performance for an open market business.

Its operating profit during the same period jumped 27 percent from one year ago to 61.5 billion won, managing to stay in the black for 15 consecutive years.

But as competition heated up and the company began trailing behind rivals such as Coupang in recent years, speculation grew that eBay could opt to sell its business in Korea, with major retail companies and private equity funds having emerged as potential buyers.

The newly appointed 50-year-old chief executive joined eBay Korea in 2003 and became sales director in 2016 before being appointed as the head of eBay Japan. He has been credited for “doubling the unit’s performance within two years,” the company said.

His predecessor Byun joined the company in 2000 before being appointed to lead the company in 2013.

“During his eight-year stint, he made eBay Korea the only leading e-commerce company in the country that stably yielded long-term profits,” the company said in a statement.

By Yim Hyun-su (hyunsu@heraldcorp.com)