SK Telecom and Amazon said on Monday that they have entered into an equity participation agreement to collaborate on the growth of the carrier's ecommerce business.
Under the deal, Amazon products will become available on 11th Street, an online shopping subsidiary under SK Telecom.
The US ecommerce giant will also get preemptive rights over shares of 11th Street, dependent on business performance. The precise terms of the deal have not been revealed.
Amazon and 11th Street will announce the specifics of their new collaborative service at a later date when they are ready, SK Telecom said.
The telco added it hopes to grow 11th Street into a global distribution hub platform that can also help South Korean sellers reach the global market.
Meanwhile, Amazon said 11th Street shared its "customer obsession" and expected the collaboration to offer a differentiated experience for South Korean consumers.
The deal between the US ecommerce giant and the telco is set to benefit both firms.
While direct purchases from Amazon is popular in South Korea, language barriers and long delivery times have meant it could never be the go-to site that it is in English-speaking countries. The partnership will look to address both issues.
At the same time, 11th Street has faced intense competition from other local shopping services offered by Coupang, eBay Korea, and Naver. The partnership with Amazon will give it the one-up that it had sought in a sector that has huge growth potential, which has been highlighted more than ever by the COVID-19 pandemic.
11th Street is also eyeing an IPO -- the company has so far received 500 billion won in funding, including from the National Pension Service. This will be another incentive for both SK Telecom and Amazon to continue this partnership.
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