[NEWS][01.05.11] eBay removed from Naver's shopping section

As technology advances, more and more people turn to the Internet to save time and effort. Many of us are magnets to convenience and Korea is no exception. In recent months, the nation has seen a rapid expansion of its online shopping market. At the center of this market is Naver, Korea's popular search portal and the fifth most used search engine in the world.

Naver aims to make their company more accessible to consumers and investors, but it is encountering a few difficulties along the way. Although eBay is based in San Jose, California and is already popular amongst United States citizens, it wants to increase its presence in Asia. eBay is taking steps to achieve its goal: Since eBay's acquisition of Gmarket Inc. for $1.2 billion in fall 2009, the firm owns Auction and Gmarket, the two largest e-commerce websites in Korea.

Previously, eBay had not proven to be a threat to Naver; Naver's Shopping Cast section had included items from eBay's database. A contract between the two firms had allowed items from eBay vendors to be listed on Shopping Cast by vendor name or by product. In return, Naver had received a 2% commission from each item sold on Auction and Gmarket through Shopping Cast.

However, as of last week, the contract has been voided. eBay recently placed an official request to remove details of eBay items on the "Knowledge Shopping" section of Naver's website. Naver is expected to return the entire database of eBay's products by the end of this week, which will disable products from Auction and Gmarket sellers from being sold through Naver.

The controversy arises from eBay officials and Naver officials. eBay officials claim that the exorbitant commission charged by Naver drove them to withdraw their product database: "We're taking such action only as a means of negotiating the high commissions Naver has been charging." However, Naver officials refuse to believe that eBay reclaimed their database only to negotiate the 2% commission. "It is a move designed to build a fence against Knowledge Shopping," stated the Naver source, citing eBay's recent renewal of its contract with Shopping Cast.

eBay's acquisition of Korea's top two e-commerce websites has catapulted the company to a position where it can dominate the Korean online shopping market. Naver officials speculate that eBay aims to prevent Knowledge Shopping from growing any further.

Source: Korea Herald, ComScore, and TechCrunch
Taken From: Koreaboo.com