Race to take over eBay nears end, as delivery app Yogiyo seeks buyer

The new owner of eBay Korea, the third-largest e-commerce operator in the country, is expected to be announced this week after a monthslong bidding process draws to a close, industry sources said.

The race is between two retail giants Shinsegae and Lotte Shopping. Both operate a wide range of businesses in the retail sector, including supermarkets and department stores, and have submitted their letters of intent for the Korean unit of eBay during the final round of bidding on June 7.

Whoever wins the race, the deal is sure to shake up the dynamics of the Korean e-commerce sector.

EBay Korea, which operates some of the country’s major online shopping platforms including Gmarket, Auction and G9, accounted for a near 12 percent market share last year by transaction volume, according to data from Statistics Korea. It is the third largest operator in the industry following Naver and Coupang, each accounting for an estimated 18 percent and 13 percent, respectively.

Lotte’s share of the market -- via its online shopping arm Lotte On -- is 5 percent while Shinsegae controls 3 percent via SSG.com.

The announcement is set to be made this week after eBay Korea’s annual board meeting on Tuesday, Yonhap reported on Sunday.

Though the amount Lotte and Shinsegae had offered to pay has not been disclosed, the report said the deal is likely to fetch less than 5 trillion won ($4.5 billion) -- falling short of eBay’s expectations.

Yogigyo, the second largest food delivery app in Korea whose value is estimated at up to 2 trillion won, will also seek a new buyer during the final round of bidding on Thursday with its sales adviser Morgan Stanley, according to industry sources.

Bidders who took part in the preliminary bidding include Shinsegae Group’s SSG.com and several private equity partners including MBK Partners, Affinity Equity Partners, Permira and Bain Capital Credit.

With Shinsegae involved in both acquisition battles, it could put a financial strain on the retail giant.

The move comes after German-based online food delivery service Delivery Hero decided to buy Woowa Brothers, who operates the country’s top food delivery app Baemin, on the condition that it would sell off Yogiyo.

According to Global Bigdata Research, Baemin remained the most popular food delivery app in Korea, with Yogiyo coming second, followed by Coupang Eats.

The gap between the second and third largest operators is shrinking, however, the industry tracker noted.

Coupang Eats’ surge in popularity comes after its “one order per delivery” policy to speed up delivery has been warmly received in recent months, prompting rivals like Baemin to follow suit.

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