April 25, 2024

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[THE INVESTOR] Lotte Group is putting pressure on SK Planet, the operator of the nation’s top e-commerce site 11st, to create a new joint online shopping platform, according to media reports on Aug. 25.

Lotte has informed SK Planet it could end their ongoing talks if there is no guarantee of sharing management rights, while SK Planet is refusing to do so due to resistance from employees, the Chosun Biz reported. 

SK Planet has reportedly been contacting offline rivals such as Lotte and Shinsegae to get funding for its money-losing 11st. Despite stellar growth in sales, 11st has suffered operating losses in recent years.

This week alone, there have been a slew of reports about SK Planet’s possible exit from Indonesia and other Southeast Asian markets due to sluggish sales and its failed talks to sell 11st to Shinsegae.

On Aug. 24, Shinsegae Vice Chairman Chung Yong-jin admitted that the retail giant had sought to acquire 11st as part of its latest online push.

An SK Planet spokesperson, however, flatly denied the statement, saying the CEO has never considered selling off 11st.

He admitted that talks are being held with Lotte, but made it clear SK Planet is taking the initiative.

“Although nothing has been decided yet, we can say for sure that the talks are under our control,” he stressed.

Keen attention is being paid to the possible tie-up of 11st and Lotte whose online transactions reach about 8 trillion won (US$7.09 billion), respectively. Their combined 16 trillion won sales would pose a direct threat to the current No. 1 eBay Korea that owns Gmarket and Auction with their transactions exceeding 14 trillion won.

By Song Seung-hyun (ssh@heraldcorp.com)