Qoo10 is likely to join hands with a financial investor in its bid to take over eBay’s South Korean operations, which would create strong synergies for the company.
Sale managers Morgan Stanley and Goldman Sachs distributed investment teasers on eBay Korea to prospective buyers two weeks ago, according to industry sources. South Korean retail giants, e-commerce companies and domestic and foreign private equity firms are expected to receive information memorandum.
Qoo10 is viewed as one of the strongest candidates to buy eBay Korea, as its chief executive officer Ku Young-bae has close ties with the U.S. e-commerce giant.
The Singapore-based company was founded in 2010 as a joint venture between Ku and eBay, with stakes of 51% and 49% respectively. The online shopping platform has localized marketplaces in Singapore, Indonesia, Hong Kong and China, and has been the largest e-commerce firm by gross merchandise volume in Singapore for years.
Qoo10 entered the Indian market recently by taking over an online retail platform. It also invested in the Japanese market and in 2018 eBay acquired Qoo10 Japan for $573 million in an attempt to gain a foothold in Japanese e-commerce.
Qoo10 operates cross-border logistics unit Qxpress, said to be the only South Korean logistics company specializing in e-commerce, with smart logistics centers.
Market insiders believe Qoo10, with its strong global network and logistics system, could generate strong synergies by purchasing e-commerce giants like eBay Korea.
“If Qoo10 opens export routes for Gmarket sellers, whose sales channels are limited to the Korean market, the transaction volume will increase exponentially,” said an industry source adding, “Qoo10, which has a higher reputation in overseas markets than the domestic market, will become a leader in the domestic e-commerce market.”
However, it is unlikely that Qoo10 will be able to take over eBay Korea on its own due to its financial situation. As it is a Singaporean entity, Qoo10’s exact cash equivalents are not known, but it has spent a lot of money acquiring foreign companies and investing in logistics in recent years, and probably won’t have enough funds to buy eBay Korea, which is expected to fetch five trillion won, industry sources said.
Partnering with a deep-pocketed financial investor is more realistic, as Qoo10 could solve its financing issue while the financial investor could have Ku managing the firm.
Ku is recognized as a self-made entrepreneur in the ecommerce field. A co-founder of online shopping mall Interpark, Ku also established Gmarket in 2003, which was initially launched as Interpark’s subsidiary.
Gmarket’s gross merchandise value reached 5 trillion won ($4.5 billion) in 2009, when the platform was sold to eBay for $1.2 billion. (Reporting by Si-eun Park)