The’distribution alliance’ of Naver and E-Mart is about to appear. As the two companies are known to form a partnership within the next week as early as possible, interest is gathered in the synergy that Naver will gain through the so-called’anti-coupang solidarity’.
According to the industry on the 10th, Naver and E-Mart are discussing various cooperation plans, including the exchange of shares worth 250 billion won. Earlier, Jung Yong-jin, vice chairman of Shinsegae Group and Kang Hee-seok, CEO of E-Mart, visited Naver’s Bundang office in January and met with Lee Hae-jin, Naver Global Investment Manager (GIO) and Han Seong-suk, Naver CEO. It is known that the cooperation between the two companies was rapidly ignited. On the 2nd, CEO Han Sung-sook said, “We talked openly about the concerns and possibilities of the distribution area (with Shinsegae)” at an online press conference. “We will open the possibility of discussions on areas where we can cooperate.” I also revealed it.
The reason they unite
It is analyzed that the reason for the two companies forming a united front is to fight against Coupang. Last year, Naver ranked first in the industry with a 16.6% share in the internet shopping market. However, the difference from Coupang, which is the second place (13%), is small, and due to the limitation of open market sales, sales compared to the transaction amount are also low. E-Mart is also growing every year since the launch of SSG.com, but its market share is insignificant. SSG.com’s transaction volume last year was 3,923.6 billion won, accounting for only 2.4% of the total amount of internet shopping in 2020, compared to 161 trillion won.
Among them, Coupang is about to be listed on the NASDAQ market on the 11th. It is observed that if the listing is made, it will be possible to raise funds amounting to 5 trillion won. With the bullets secured by Coupang, Coupang plans to make large-scale investments in domestic logistics infrastructure. By 2025, Coupang logistics centers will be established throughout the country, and the strategy to realize delivery within 10km will be realized. This is the background that Naver and E-Mart, which used to be competitive, turned into friendly forces.
Things that Naver doesn’t have
In the industry, Naver Shopping It is expected that E-Mart will enter the service. Naver, which has been evaluated for its fragility in the fresh food sector, attracted large retailers such as Homeplus, GS Fresh Mall, and Nonghyup Hanaro Mart to online shopping services that had only stores in local markets and department stores last year. When Shinsegae joins the grocery store through this mutual business, Naver will be able to stably supply and supply high-quality products.
Naver, which does not have its own delivery infrastructure, has a logistics network. Maximum weaknessWas. Coupang has its own delivery infrastructure and full-filment through direct purchase (an integrated logistics management system that oversees storage, packaging, delivery, and inventory management). This can also be filled through cooperation with E-Mart. Rin-ah Oh, a researcher at E-Best Investment & Securities, predicted through the report that “we will be able to solve the problem of logistics hubs, which was considered a weakness from Naver’s point of view.”
The core is E-Mart’s 141 offline stores nationwide and SSG.com’s Yongin and Gimpo distribution centers. In particular, E-Mart operates a PP (Picking & Packing) delivery center, an online order processing unit at most stores. E-Mart plans to strengthen delivery by continuously expanding the PP center, which serves as the logistics base for SSG.com. In addition, as Naver has invested in, it is expected that a more compact logistics network design will be possible by cooperating in all directions with logistics start-ups such as Vureung and CJ Logistics, which has already exchanged shares.
Open market collaboration with SSG.com can also be illustrated. Naver Business Development Office leader Kim Pyeong-song said at the last Naver meetup, “We will create a model that supports cooperation between local producers and large retailers across the country. “We will create a collaborative model that supports product quality management and producer branding.” In addition, there are opinions that the collaboration between Naver and E-Mart will be developed in various ways. This is because there are many elements that can cooperate with Shinsegae Group affiliates as well. Some are looking forward to synergy with Naver Pay, which is a simple payment method. It is also predicting the possibility of linking with offline stores or creating an integrated membership.
Meanwhile, on the same day, Naver and E-Mart said, “We are reviewing strategic plans for business growth,” through their respective disclosures. “We will re-disclose the details within a month or when the details are finalized.”