I am asking myself the question, what is so special about Gmarket Inc. (NASDAQ: GMKT)? Jim Cramer made a mention about it on his show yesterday, and was going on about how it is going to take on EBay, and Amazon. I had never heard of Gmarket before, and neither had a lot of people. The site itself is a Korean auction site, with very little that would appeal to the regular North American. The site does NOT have a very aesthetic appearance. Pictures are flipping out from animations, and the site over-uses images with very little text. I have no idea why Jim would think the site looks better than Ebay. From an economical perspective, there is a good chance that this company would do very well in Korea. Probably even beat the American competition like Ebay. Although, that is probably going to be the only market for this company. If they tried to enter the North American market, they would lose because we won’t put up with ugly looking webpages. When designing retail websites these days, one of the key components is a nice clean design. Too bad Gmarket didn’t listen and their site is UGLY. Luckily for Jim, people don’t do a lot of research, and jump at whatever he says. The stock is up 1.64 or 8.01% to 22.12 in early trading today. I expect that the stock will fall back down to its previous trading prices after a week, and then the stock will be a decent deal.
6 thoughts on “What is so special about Gmarket?”
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Maybe it’s the features?
You don’t mentiond if he said it would take on ebay and amazon in north america. Beating them in (almost) any country could be a good sign for a company, even if it won’t be another google.
The company has a strong foothold in the Korean market, and I don’t expect that to change. What I do expect is for them to not gain anything outside the Korean market. The way some people have been buying the stock today, its as if they announced plans for expansion into English markets. Last time I checked the stock was up 11.87% because one person said it looks like it could have a strong future. The volume of shares traded today is over 2 million and the stock normally averages 353,000. Too much hype about this stock floating around.
The stock was up last night in after hours trading because Tom Online announced a deal with eBay, not becuase of what cramer said.
The stock was up 8% before the show even came on air.
It’s evident that eBay is struggling in Asia and Gmarket may have a chance to take over the chinese and japanese e-commerce market, which they plan to enter over the next year or so. Although they might not succeed in the US, i think those two markets are large enough to get the stock moving.
Gmarket’s major increase today cannot be solely put onto the Tom Online announcement. I believe that the announcement probably helped to spur things along, but the Cramer segment is also moving a lot of shares around. I believe both pieces of news are also waking some people up to the fact that the Asian market is growing and there is a lot of money to be made.
In my opinion the Tom Online agreement with eBay would do more harm to Gmarket’s chances if they planned on expanding into China. Tom Online is a very popular site in China and the partnership with eBay will only strengthen things. Tom Online was up 14% so far today after the news.
I completely agree that eBay is struggling big time in the Asian markets, and I don’t believe that things will change. I believe in the future, that the company who controls the Chinese market will also control worldwide market. To me, Tom Online looks like the better bet to control the market in China.
Gmarket may have saturated it’s growth in Korea, but if it can manage to be one of the major online markets in China and Japan, I still think there’s plenty reason to be bullish on the stock. With its proven success in Korea, and the China’s affinity for Korean culture and goods, I think they have a good chance to become a major player.
Also in regards to entering the US market, I also believe that it will be a difficult task for Gmarket to overtake ebay and amazon. However, one thing to mention is that they have Yahoo backing them up on the US market venture. Even Gmarket knows that while cute and fancy animations work in Korea and most of Asia, they will need to make major strategic movements before they can even think of being successful in the US, starting with the design of their homepage. That’s where Yahoo comes in.
Yahoo’s gonna have to make some major breakthroughs to survive the competition and Gmarket may be one of them.
I just don’t see Yahoo surviving much longer in today’s fast paced world. I am expecting some mergers and acquisitions to come in soon. With Google continuing to control the search market and expanding outwards, I expect they will make some major move into online retail. Consumers have already shown a strong liking to Google over Yahoo, and I just don’t see this changing.