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| SK Planet’s headquarters in Pangyo in Seongnam, Gyeonggi Province / Korea Times file |
By Kim Jae-heun
The country’s second-tier e-commerce operators are reviewing their best options on how to survive in the highly competitive local e-commerce market, with SK considering forming a partnership with Lotte.
Shinsegae’s sole decision to acquire an 80 percent stake in eBay Korea means, if the transaction is completed as scheduled, the local e-commerce market will be reshaped centering on three major players ― Naver, Shinsegae and Coupang.
Currently, Naver is the top player in Korea’s e-commerce market with a 17 percent market share, followed by Shinsegae with 15 percent (12 percent which eBay Korea controls) and Coupang with 13 percent. SK is the fourth-largest player with a market share of 6 percent, followed by Lotte with 5 percent, which are way too low to compete against the top three.
Acknowledging the further growth potential of the country’s e-commerce market, SK is hoping to challenge the sector leaders via active collaboration.
“We will open a store within 11st in collaboration with Amazon in July and we will discuss with Lotte and Homeplus various ways of possible cooperation in the second half of this year,” SK Telecom Chief Finance Officer Yoon Poong-young said last week. “Lotte Group and Homeplus are expected to explore the best possible ways to level up their mutual partnership.”
SK Telecom is an operator of the fourth-largest e-commerce firm, 11st. Homeplus is a local discount store retail chain operated by private equity fund (PEF) MBK Partners.
SK Telecom has been looking for a retailer to cooperate with its e-commerce firm since early this year, according to sources in the local banking industry. “SK is hoping to strengthen its overseas direct purchase services with Amazon and fresh food shopping with local discount store chains,” one source said.
The remarks by the SK executive are interpreted by many as the company’s willingness to enter a comprehensive partnership with Lotte, Homeplus or both in the second half of this year.
Given its strengths in logistics and retail channel systems, any alliance with Lotte Group could help SK gain some advantages in terms of improving sales given Lotte’s abundance in retail stocks.
Also, Lotte is seeking to get help from online retailers as its ambitiously launched Lotte ON mobile platform failed to impress despite hefty investments, according to sources familiar with the matter.
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