Naver announced its plans to launch a dedicated shopping app this month, hinting at a direct showdown with domestic e-commerce giant Coupang. Naver, which last year surpassed an annual transaction amount of 50 trillion won for the first time through 'Naver Shopping,' is attracting attention to see if it can achieve 'double-digit growth' this year with its AI-based personalized shopping service.
According to Naver on the 1st, an AI-based dedicated shopping app named 'Naver Plus Store' will be launched this month. The shopping service currently provided under the 'Smart Store' tab in the existing Naver app will be separated through the dedicated app.
The app's most significant feature is its combination of an AI-based personalized recommendation service with the existing shopping search service. It shows users products they are likely to be interested in, considering factors such as their purchase and viewing history or generational characteristics, and encourages purchases.
Naver, which recorded sales exceeding 10 trillion won for the first time last year, aims to continue its growth in the e-commerce sector with the launch of the AI-based shopping app this year. Choi Soo-yeon, Naver's CEO, has mentioned in last month's earnings conference call that the company is aiming for 'double-digit growth exceeding market growth rates' as a strategy to achieve its transaction targets for this year’s smart store. Last year, Naver's commerce sector (including Naver Shopping) sales reached 2.923 trillion won, accounting for 28% of total sales (10.7377 trillion won).
For Naver to achieve its targeted revenue growth in the shopping sector, a direct confrontation with the domestic e-commerce platform giant Coupang seems inevitable. Recently, Naver has strengthened its delivery services by signing business agreements with fulfillment companies like CJ Logistics, implementing '7-day delivery,' 'same-day delivery,' and 'next-day delivery,' which many see as measures taken in light of competition with Coupang, which specializes in delivery competitiveness. Naver is considering introducing 'instant delivery,' which starts delivering products immediately upon order, and 'early morning delivery,' well known for Coupang's rocket delivery service. Starting this month, a new delivery service called 'Naver Delivery (N Delivery)' is set to launch, providing 'free returns and exchanges' for Naver Plus membership members.
According to industry sources, Coupang's annual payment amount reaches 60 trillion won. Coupang, centered on its e-commerce business, recorded sales of over 40 trillion won for the first time last year. In comparison, Naver's commerce sector, with an annual transaction amount of 50 trillion won, has sales in the 2 trillion won range, showing a significant difference.
An industry insider noted that 'Coupang's sales are large because 90% of its sales are from direct purchases,' while 'Naver operates entirely under an open market model, where the transaction amount can reach 50 trillion won, but its sales remain in the 2 trillion won range.' They explained that 'Coupang is expanding its business from direct purchases to the open market, while Naver is expected to shift toward direct purchases to expand its sales. A direct confrontation between the two companies seems unavoidable.'
Another industry insider commented, 'In Coupang, where the focus is on direct purchases, sellers have their margins determined by Coupang, whereas in Naver, which focuses on intermediary shopping, sellers can determine their margin rates. Therefore, it is expected that Naver will introduce various carrot policies to expand its market, leading to a possibility that sellers who previously sold through direct purchases at Coupang will shift en masse to Naver's shopping app.'
One of Naver's advantages in competing with Coupang is its AI capabilities, as well as its large membership base and overwhelming monthly active users (MAU). According to Naver, the number of Naver Plus membership subscribers has exceeded 10 million. Coupang's Wow membership subscribers total about 14 million. According to analytics service providers WiseApp and Retail, Naver's MAU was approximately 44 million in January, about 34% more than Coupang's roughly 32.93 million.
However, there are also concerns about intensifying competition between the two companies. Kim Kyung-won, a distinguished professor at Sejong University, stated, 'While the clash between Naver and Coupang will enhance consumer benefits, excessive price competition may actually reduce margins for sellers,' and noted that 'with enhanced AI search functions, consumers will be able to find the cheapest products more conveniently.'