Naver Shopping is a leading player in Korea’s cutthroat e-commerce market, outperforming strong competitors like Coupang and eBay Korea. It now wants to take that success overseas, namely to Japan, Southeast Asia and Europe.
Naver controlled 17 percent of the Korean e-commerce market in 2020, followed by Coupang’s 14 percent and eBay Korea’s 12 percent, according to data from Kyobo Securities.
Internationally, Naver has already launched a beta e-commerce service, MySmartStore, in Japan in October.
It creates online shopping malls for individual sellers that can be synced to a Line messaging app account. Naver plans to make the service official by spring 2022.
Naver further plans to expand across Southeast Asia and Europe.
It jointly invested in a 1-trillion-won ($842-million) fund created with Mirae Asset Group in 2018, with each company putting in 500 billion won. Grab, a Singapore-based food delivery, and Bukalapak, an Indonesian e-commerce provider, are some of the companies included in the fund. Naver also invested 155 billion won in Wallapop, a Barcelona-based marketplace for trading secondhand goods.
Naver said it seeks to generate synergy effects with international companies it has invested in to expedite its global expansion.
Naver is a latecomer to the Japanese e-commerce market, but it says it still has a chance because of the relatively small e-commerce penetration rate in the country and its strong local partnerships.
“The online shopping penetration rate is low in Japan, but that will actually function as an opportunity for a latecomer like Naver because that means there’s more room for growth,” said Yoo Jee-min, a spokesperson for Naver.
In 2020, 49 percent of households with two or more people in Japan purchased goods or services online, according to Statista. The internet shopping usage rate in Korea was 69.9 percent in the same year.
MySmartStore’s main service is creating independent e-commerce websites for individual sellers.
Utilizing the Line messenger app, which is the most used mobile messenger service in Japan, Naver hopes to lower the entry barrier for using MySmartStore.
The service, synced to a Line app account, allows sellers to offer promotions and answer customer inquiries through Line chat.
Line oversees the sales and marketing of Naver’s e-commerce business in Japan.
Naver generates profit from receiving commission on sales made on websites it creates. But to recruit sellers, the company is temporarily offering zero commissions for a year to people who newly join MySmartStore by the end of March. Making payments on the messaging app may also become possible in the near future, according to Naver.
Cosmetics, food and beverage sellers are some of the early MySmartStore customers.
The IT company is also banking on its local partners to help its foray into the country.
Japan’s e-commerce market is controlled by three major players: Amazon, SoftBank and Rakuten. In 2020, Amazon accounted for 25 percent of the market, followed by SoftBank at 14 percent and Rakuten at 12 percent, according to Euromonitor International.
Naver’s local partners include …….