A Coupang employee carries out a logistics task with a service truck in Seoul, Feb. 26. Yonhap
Naver CEO Choi Soo-yeon / Yonhap
Naver, which operates the country's largest online search engine, has launched a new e-commerce service, challenging Coupang, Korea's leading online shopping platform operator.
The IT giant's expansion into the shopping industry, however, has drawn mixed responses.
Naver's new online shopping platform is set to challenge Coupang's market leadership, which it has enjoyed over the past decade. Despite beating Coupang in the number of monthly active users by a whopping 10 million, Naver's new move comes with its own setbacks. Some industry experts remain skeptical over whether Naver can outpace the e-commerce giant, which has invested trillions of won in its own logistics system to ensure fast delivery.
On Wednesday, Naver launched Naver Plus Store on Google Play and will launch the app on Apple's App Store as well. The app is the company's new shopping platform, separate from the Naver search engine.
The key advantage of Naver Plus Store lies in its artificial intelligence (AI)-powered recommendation system. By analyzing the user's age, gender, shopping habits and personal interests, as well as monitoring current news, blog posts and community discussions, the AI provides tailored suggestions that best match user preferences.
Naver has also invested in logistics for the new service, aiming to ensure quick delivery. It provides users with specific delivery options such as “today” to “tomorrow,” “Sunday” and “preferred date.”
The app charges zero fees for refunds and exchanges, a benefit similar to what Coupang offers. It also partnered with logistics companies like CJ Logistics to handle deliveries, in contrast to Coupang, which operates its own logistics network.
Market experts speculate that with its new app, Naver aims to match Coupang's fast delivery while gaining a competitive edge through its AI-powered recommendation feature.
However, market experts note a key limitation for Naver. Unlike Coupang, which sells products directly and operates its own logistics network, Naver Plus Store functions solely as a platform without its own inventory or delivery system. This distinction allows Coupang to offer its Rocket Delivery service, ensuring next-morning delivery. In Korea's online shopping industry, where speed is paramount, this gives Coupang a significant advantage.
“Coupang has invested in over 100 logistics depots nationwide, where deliveries all across the country actually start,” a Coupang official said. “More than 90 percent of our transactions come from our direct sales, which allows us to deliver items by the next day.”
An industry official said on condition of anonymity that platform operators like Naver simply cannot achieve the same level of delivery speed.
“The launch of a separate shopping platform does not change Naver's fundamental e-commerce operation structure,” the official said.
“Naver only bridges sellers and consumers, and does not sell goods directly to consumers. The company also commissions other logistic companies for delivery without its own logistic capability. Limitations certainly exist for Naver.”
As of January, Naver's monthly active users surpassed 44.1 million, compared to Coupang's 32.9 million. However, Coupang had over 14 million paying members last year, while Naver's membership base is estimated to be below 4.6 million. In terms of revenue, Coupang recorded over 41.29 trillion won ($284 million) last year, significantly outpacing Naver's 10.73 trillion won.