Ebay has bagged a whopping deal. The legendary online platform for buyers and sellers of used or new items has sold a national subsidiary for a hefty sum of $3 billion. This means that the company is once again shrinking by a large corporate share. The sale is said to have taken place again under pressure from investors.
South Korea subsidiary sold
As has become known, Ebay has parted with the majority of its South Korean offshoot. The buyer of the platform is said to be Emart. The reason for the sale is probably the restructuring of the group, which has been going on for some time. The online platform has sold a whopping 80.01 percent and thus the majority of its subsidiary for the equivalent of 3 billion US dollars. As the largest South Korean retail chain, South Korea’s Emart secures the perfect foundation for its freshly established online store with the purchase.
Low growth as reason
Ebay itself will not have been too hurt by the sale. After all, the traditional online store in South Korea was already left behind by the competition some time ago. This is particularly shocking when you look at the general development of the online shopping market in South Korea. For example, this economic segment recorded a whopping 41 percent growth between 2018 and 2020. In the same period, however, the regional Ebay was only able to record 4 percent growth. It’s hard to be more clearly left behind by the competition.
Is Ebay slowly disintegrating?
Although there are good reasons behind every sale, the slow shrinking of the popular sales platform has a bland aftertaste. One gets the feeling it all started with the partial takeover by billionaire investors Elliott Management and Starboard Value. These demanded piece by piece a sale of in their opinion unimportant enterprise branches of Ebay. If one listens to the opinion of economic experts, this course will probably lead to the destruction of the once so successful sales platform sooner or later. The two investors, on the other hand, are likely to continue building their fortunes sale by sale. We are curious to see where Ebay’s journey will take it and fear the end of the digital marketplace.