Merger and acquisition advisory firms are closely looking at EBay Korea and Yogiyo, but some possible buyers may exit due to doubts over their tenuous market positions.

Private equity (PE) firms and industry players have reportedly been approached to buy the firms, with rivals of eBay Korea and Yogiyo also likely to show interest because they would at least want to have access to information provided by the companies.

They will need deep pockets, as both firms are expected to be worth trillions of won.

However, industry watchers said it is uncertain whether potential buyers will remain in the race. One obstacle cited is their comparatively weak market positions.

Yogiyo, a subsidiary of Germany’s Delivery Hero, is the second largest player in the South Korean food delivery app market, but its 20% share is dwarfed by that of industry leader Baedal Minjok, run by Woowa Brothers, which controls 78%.

eBay Korea is the only profitable company in the country’s ecommerce market. However, doubts are growing over its long-term prospects as competition tightens.

Interestingly, the market positions of both companies are threatened by SoftBank-backed Coupang, observers said.

Yogiyo, which lacks offerings that can differentiate it from competitors, is increasingly being challenged by Coupang’s food delivery service Coupang Eats, the third largest player in the market with about a 5% share. Many believe that it is only a matter of time before Coupang Eats emerges as a major market player, given its strong backing from Coupang’s investors and novel marketing strategies.

“Coupang is preparing for an initial public offering on the Nasdaq, which, if it happens, would offer access to more new capital to aggressively expand its business in the food delivery market,” an industry insider said. “Coupang Eats, which currently provides its service only in Seoul, would likely easily become the second largest player once it starts to operate nationwide.”

Coupang is also considered one of the strongest competitors to eBay Korea. Unlike eBay Korea, which mainly operates as a third-party ecommerce platform, Coupang runs first-party and third-party businesses. It also has been focusing on building its own logistics capability, investing heavily in new warehouses and technologies.

In addition, EBay Korea is being challenged by Naver Corp. The internet giant recently announced a partnership with CJ Logistics in a bid to increase its presence in the ecommerce market by expanding its shopping platform Smart Store.

“Both eBay Korea and Yogiyo face increased competition from rivals, but they are not strong enough to maintain their shares. This makes them less attractive to private equity investors,” said another industry insider.

“For industry players, the price tags of the two firms could look excessively high given their mediocre market positions.” (Reporting by Hee-yeon Han)