SK Planet rumored to be splitting off 11st

SK Planet is rumored to be pursuing a split of its online open market platform 11st to create a new joint company with one of Korea’s major retailers as profits continue to fall, according to industry sources Wednesday.

The rumors come as the e-commerce market in general struggles to keep up with intensifying competition. Despite growing transactions online, e-commerce players are finding it difficult to stay profitable as they battle for advantages in delivery services and price competitiveness. 

Although 11st is the largest online marketplace after eBay Korea’s Gmarket and Auction, industry estimates put its operating losses last year at about 200 billion won.

SK Planet said that nothing is for certain yet.

“Since last year, SK Planet has been considering avenues for growth including outside investments and strategic investments, as well as synergy with Korean retailers. However, nothing is for certain yet,” a spokesperson for the company said, declining to confirm whether talks were already underway.

Retail giants Shinsegae and Lotte, who were named as potential partners in media reports, also declined comment.

If 11st did merge with Shinsegae’s SSG.com or Lotte’s online store, it would become the leading online marketplace. According to analyst estimates, transactions at eBay Korea’s marketplaces totaled about 12 trillion won last year, followed by 11st at between 7 trillionwon and 8 trillion won. Lotte and Shinsegae’s online operations saw transactions of 8 trillion won and 2 trillion won, respectively. 

By Won Ho-jung (hjwon@heraldcorp.com)