SEOUL -- Amazon will jump into South Korea's e-commerce market through a partnership with an SK Telecom unit, giving consumers here access to a wide range of products sold by the U.S. retail titan.
SK Telecom announced the deal on Monday. According to a source, Amazon obtained the right to acquire a stake of up to 30% in 11Street, an e-commerce market operator whose parent company is SK telecom. Depending on the performance of the partnership, Amazon could invest hundreds of millions of dollars in the company. Details of the joint service, including the start date, will be hammered out going forward.
The company was valued at an estimated 2.8 trillion won ($2.52 billion) in 2018 based on a due diligence review.
For 11Street, teaming with the world's largest online retailer could let it offer products and services that rivals cannot, as the South Korean company fights to stand out and survive in a market that, though relatively small in global terms, is fiercely competitive.
The arrangement will help Amazon reach South Korea's 52 million people.
Whether the partnership will lure customers away from bigger players in South Korean e-commerce remains unclear.
SoftBank Group-backed Coupang, South Korea's largest online retailer, logged 7.15 trillion won in revenue last year, compared with 530 billion won for 11Street. Search engine operator Naver is expanding its online mall business, while other companies including Lotte Shopping, part of the Lotte conglomerate, are increasing operations in this area as well.