Retail tech corporation Kurly has officially entered Naver (NAVER) Smart Store, marking the beginning of its full-fledged collaboration. Kurly has expanded its customer base by leveraging Naver's vast user base. Naver is praised for enhancing its platform competitiveness by compensating for its weaknesses in the institutional sector of fresh food. The industry is keenly observing whether this partnership can change the landscape of the domestic e-commerce sector, which is dominated by Coupang.
According to the retail industry on the 5th, Kurly opened 'Kurly N Mart' in Naver Plus Store starting the previous day. This is the first time Kurly has ventured into an external platform instead of its own app and website.
With its entry into Naver, Kurly has gained a significant opportunity to attract a large number of customers. Kurly's existing main customer base consists of residents in the metropolitan area and two-person households, and for the past few years, its monthly active users (MAU) have remained at around 3 million. Kurly plans to expand its product portfolio from its existing focus on fresh food and beauty products to include household and kitchen items, thereby broadening its customer range.
A representative from Kurly noted, 'During the process of entering Naver, we secured over 5,000 new products that we had not previously handled. We will now be able to meet the customer demand for larger quantities and cost-effectiveness for households with four or more people,' adding, 'In Kurly N Mart, we plan to continuously add new items in the food and household kitchen product sectors.'
Kurly's logistics subsidiary, Kurly Next Mile, has joined Naver's logistics consortium, Naver Fulfillment Alliance (NFA), and has started cooperating with CJ Logistics, which had an existing partnership with Naver. This will enable Kurly to secure a logistics system capable of supporting the increased customer numbers and ensure stable overnight delivery services.
Naver Commerce has been criticized for being operated only in an open market format, which has weakened its competitiveness against Coupang, which combines its own logistics and delivery. However, with the addition of Kurly as an ally, it has managed to overcome some of these weaknesses.
◇ Naver and Kurly alliance foreshadows a chase for Coupang
The Naver and Kurly alliance is signaling a chase for the top e-commerce player, Coupang. Coupang recorded a revenue of 23.4639 trillion won in the first half of this year, an increase of about 20% compared to the same period last year. The second quarter revenue (11.9763 trillion won) has broken the record for the highest quarterly revenue consecutively, following the first quarter (11.4876 trillion won). The operating profit for the first half was 443 billion won, a 224.4% increase from the same period last year.
Coupang is also focusing its efforts on strengthening its fresh food sector. In February, Coupang introduced its 'Premium Fresh' service, which selectively provides high-quality fresh foods to Wow members. Bom Kim, the chairman of Coupang Inc., stated during the second-quarter earnings conference call, 'Sales in the fresh food sector increased by 25% compared to the same period last year.'
Naver is rapidly increasing its transaction volume through its shopping-specific app, 'Naver Plus Store,' launched in March of this year. The app recorded nearly 5 million MAU just one month after its launch. In the first half of this year, Naver Commerce's transaction volume reached about 25.7 trillion won, an increase of approximately 4.5% compared to the same period last year.
Kurly's sales in the first half increased by 8% year-on-year, totaling 1.1595 trillion won. The operating profit was 3.1 billion won, marking its first half-year breakeven in 10 years. Kurly maintains its strengths in the overnight delivery service for fresh foods while also enhancing its non-food sectors such as beauty, household items, and appliances to boost both revenue and profitability. There are expectations that the recent entry into Naver will accelerate improvement in its results.
Orina from LS Securities noted, 'Through collaboration with Naver, Kurly will be able to increase its purchasing scale, and will also gain cost and logistics efficiency improvements as a result.'
'Following Kurly Next Mile's entry into the Naver Fulfillment Alliance, the inflow of cargo clients is accelerating, and thus the volume of goods related to the launch of Kurly N Mart is expected to increase as well. This will have a significant strength on profitability,' she added.