Naver, one of the pillars of domestic e-commerce, is strengthening its own e-commerce ecosystem in partnership with E-Mart, an offline distribution powerhouse. Each company admitted that they are considering cooperation plans with the goal of reinforcing e-commerce competitiveness by filling each other’s shortcomings. It is noteworthy whether Naver will be able to counter Coupang, another powerful e-commerce player, through cooperation with E-Mart in the future.
According to related industries on the 10th, it is known that Naver and E-Mart will sign an agreement to exchange shares in the near future. Naver said, “We are reviewing various measures to strengthen business competitiveness (with E-Mart), but there are no specific issues that have been decided at this time.”
The industry predicts that the two companies will seek e-commerce cooperation plans, taking into account the fact that in January, Hae Jin Lee, Naver Global Investment Manager (GIO) and Naver CEO Han Sung-sook, met with Shinsegae Group Vice Chairman Jeong Yong-jin and Kang Hee-seok, E-Mart CEO.
In particular, on the 2nd, CEO Han Seong-sook said, “We talked openly about concerns in the distribution area like (Shinsegae) and where cooperation is possible.” .
Online and offline distribution powerhouses meet
In addition to providing shopping information and price comparison that encompasses both online and offline, explosive synergy is expected when Naver, which has 420,000 smart stores, meets E-Mart, which is engaged in online and offline business centered on marts.
Naver has had smart stores, department stores, Soho Mall, local markets, and some marts in Naver Shopping to expand its e-commerce business, but has been thirsty for distribution and logistics.
For this reason, it seems that there is a clear will to expand the business linked to offline by using E-Mart’s distribution and logistics infrastructure.
To this end, it is highly likely that Naver will launch E-Mart in its own shopping service first. Currently, Naver shopping service includes Homeplus, GS Fresh Mall, Nonghyup Hanaro Mart, neighborhood market, and department store food hall. Same-day delivery and early morning delivery services are provided through Homeplus and GS Fresh Mall, but fresh food delivery can be expanded through E-Mart’s entry. If you connect to Naver, you can also plant an image that all products can be shipped.
Until now, Naver has emphasized externally that fresh food such as abalone can be ordered through a smart store. The partnership with E-Mart is expected to expand e-commerce competitiveness by showing that it is possible to deliver various fresh foods as well as products owned by E-Mart.
In the case of E-Mart, it is possible to expand the platform by entering Naver’s shopping mall. It is a strategy to increase market share by expanding sales channels. It is also expected to quench the thirst for open markets. It is expanding the open market business by incorporating Naver’s shopping database (DB) and technology into its own platform.
Last mile is also possible with Naver-E-Mart.
Naver has already exchanged shares with CJ Group to fill the shortcomings in the logistics field. The strategy is to take responsibility for the delivery of sellers who use their platform by utilizing the infrastructure that CJ Logistics has.
For example, a smart store seller with a certain order guarantee can use CJ Logistics’ full-filment service, providing not only fast delivery but also customized delivery. Such logistics cooperation is expected to lead to cooperation with E-Mart. Naver, CJ Logistics, and E-Mart can also anticipate all-round cooperation.
A picture of the last mile service of Naver and its partners is also drawn. Naver has already invested in logistics startups such as Vureung as expected. As the demand for Last Mile, which directly connects sellers and consumers, increases, the possibility of a logistics startup with Naver as a major shareholder in the delivery service between E-Mart and CJ Logistics is also predicted.
What happens to the domestic e-commerce market?
Since the new year, the domestic e-commerce market has been hot due to the issue of listing on the Coupang New York Stock Exchange and the sale of eBay Korea.
First, if Coupang is listed, it will secure enough bullets to invest in infrastructure such as distribution centers, which can pose a great threat to domestic e-commerce companies.
In addition, the company that acquires eBay Korea is attracting great attention because it has a scale comparable to that of Naver and Coupang.
As Naver and E-Mart join hands, there are also observations that Shinsegae may step away from the acquisition of eBay Korea. However, Shinsegae is still regarded as a strong candidate for acquisitions such as Lotte and Kakao.
Both Shinsegae and Lotte can be said to be strong in offline distribution, but expanding business online remains a task. Shinsegae may try to expand its open market business and secure a distribution center through the acquisition of eBay Korea.
In the case of Lotte, it is expected that it will be able to increase its scale by acquiring eBay Korea to expand its e-commerce competitiveness and create synergy with offline stores.
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An industry insider said, “If distribution companies are willing to take over eBay Korea while taking additional investments, it remains to be seen whether they will fill in the shortcomings through equity exchange,” and “It is expected that a full-fledged’war of money’ will begin in the e-commerce market this year. I can see it.”