이 기사는 2021년 04월 14일 07:35 thebell 에 표출된 기사입니다.

Kakao Corp is nearing a deal to buy online fashion platform Zigzag in a surprise move after dropping out of the race for eBay Korea, but concerns are rising that the price to be paid for the company is too expensive.

The deal, which is expected to be signed as early as this week, values the online clothing retailer at 1 trillion won ($888.5 million), industry sources said, which would bring it close to a “unicorn” status (private valuation of $1 billion or more).

Kakao had previously been in talks to acquire Zigzag but the two sides failed to reach an agreement on the price. The online fashion platform had since been looking for outside investors, sticking to its plan to retain a controlling stake.

“Zigzag’s management first turned down a takeover offer from Kakao because they thought it undervalued the company,” said an industry insider. “As recently as January, Zigzag was considering other options to raise funds.”

However, negotiations between the two companies began to pick up earlier this year as Kakao raised its offer, valuing Zigzag at 1 trillion won. The internet giant has dropped out of the race for eBay Korea and has instead chosen to focus on niches of online fashion platforms that are popular among younger consumers to strengthen its position in the competitive ecommerce market.

The 1 trillion won valuation is 1.33 times Zigzag’s 2020 gross merchandise value (GMV), the highest price paid to a platform business in South Korea. In comparison, Delivery Hero’s $4 billion takeover of Woowa Brothers, which operates food delivery platform Baedal Minjok, represented 0.6 times GMV.

In the online fashion sector, SSG.com earlier this month bought 100% of W Concept for 265 billion won, outbidding rivals in a heated bidding war. The price was equivalent to 1.1 times GMV.

Kakao’s acquisition of Zigzag despite overvaluation concerns indicates rising worries in the company about its lagging position in the ecommerce market, industry watchers said. As of 2020, Naver held an 18.6% share in the South Korean digital commerce market, followed by Coupang with 13.7% and Kakao with a mere 2.9%.

Kakao’s ecommerce strategy has so far focused only on Kakao Talk’s gift service, Kakao Gifts, and social commerce service, Talk Deal. This contrasts with Naver and Coupang, which have continued to heavily invest to become dominant in the market.

“Kakao is trying to make up for its lagging position in the ecommerce business by increasing investment in niche markets,” said an industry source. “With some analysts raising concerns about the 1 trillion won valuation of Zigzag, Kakao could face headwinds in the future if the synergy between the two does not work out as expected.” (Reporting by Se-hun Jo)