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Coupang, Naver on alert as YouTube enters e-commerce market

YouTube logo / Courtesy of YouTube
YouTube logo / Courtesy of YouTube

By Kim Jae-heun

Competition in the local e-commerce market is expected to become much fiercer as two of its leaders Coupang and Naver are being threatened by the appearance of YouTube.

YouTube has recently introduced a worldwide pilot service called "Shopping Extension" for its platform.

The service shows a "SHOP NOW" button at the bottom of the screen for people to click while watching the commercials between videos and it launches a pop-up ad for the related product stating its information and pricing.

The pilot service only lets certain advertisers promote their products online for now but when the service is officially launched it will be available to everyone who advertises their products.

YouTube came up with an idea of Shopping Extension after learning that 70 percent of its users shop with brands they come across on its video content.

"Prolonged store closures have forced brands around the world to recalibrate their media campaigns to focus on driving online sales," Director of Product Management at YouTube Ads Nicky Rettke wrote on the platform's official blog. "With this shift to digital, it's become even clearer that every advertiser is a performance advertiser."

YouTube will be the first platform to combine its commercial and shopping systems. Industry insiders believe this will create a new sensation not only in Korea but internationally.

Currently, YouTube only provides a small button on videos that says "Learn more," which leads viewers to an external page that could lead to possible online purchases.

YouTube has 30 million monthly average users (MAU) here alone and the number is big enough to change the dynamically changing e-commerce market here that is pursued by firms from various industries.

It was open market platforms like 11st and Gmarket that pioneered e-commerce here. Then, Coupang emerged as a major player with its overnight delivery service that lured masses of consumers from offline stores to online platforms amid the COVID-19 pandemic.

Naver, the country's largest portal site operator, is also in direct competition with Coupang with its open market service.

But when it comes to number of users, YouTube comes out ahead of them.

According to the mobile application analysis platform Mobile Index, in May YouTube had 32.94 million MAU, followed by Naver with 29.91 million and Coupang with 13.86 million.

YouTube has already dominated Naver when it comes to online streaming. Now Naver's shopping platform business is being threatened by YouTube.

The American video sharing platform has not earnestly started its e-commerce business yet. But industry insiders believe it is only a matter of time before it takes over the domestic online shopping business.

"Naver also started its e-commerce business as a broker rather than operating a platform. Without a doubt, YouTube will develop a new system for online shopping in some form, which is a clear source of revenue," said Lee Sang-woo, a media professor at Yonsei University.

Naver also said it expects major global firms to enter the domestic online shopping business and that the competition here is likely to get fiercer.

Naver, Coupang and eBay are in fierce competition in the e-commerce sector. According to Mirae Asset Daewoo, Naver took the lead with a market share of 14 percent, followed by Coupang with 12 percent and eBay with 11 percent. EBay Korea operates Auction and Gmarket here.


YouTube logo / Courtesy of YouTube
YouTube logo / Courtesy of YouTube

By Kim Jae-heun

Competition in the local e-commerce market is expected to become much fiercer as two of its leaders Coupang and Naver are being threatened by the appearance of YouTube.

YouTube has recently introduced a worldwide pilot service called "Shopping Extension" for its platform.

The service shows a "SHOP NOW" button at the bottom of the screen for people to click while watching the commercials between videos and it launches a pop-up ad for the related product stating its information and pricing.

The pilot service only lets certain advertisers promote their products online for now but when the service is officially launched it will be available to everyone who advertises their products.

YouTube came up with an idea of Shopping Extension after learning that 70 percent of its users shop with brands they come across on its video content.

"Prolonged store closures have forced brands around the world to recalibrate their media campaigns to focus on driving online sales," Director of Product Management at YouTube Ads Nicky Rettke wrote on the platform's official blog. "With this shift to digital, it's become even clearer that every advertiser is a performance advertiser."

YouTube will be the first platform to combine its commercial and shopping systems. Industry insiders believe this will create a new sensation not only in Korea but internationally.

Currently, YouTube only provides a small button on videos that says "Learn more," which leads viewers to an external page that could lead to possible online purchases.

YouTube has 30 million monthly average users (MAU) here alone and the number is big enough to change the dynamically changing e-commerce market here that is pursued by firms from various industries.

It was open market platforms like 11st and Gmarket that pioneered e-commerce here. Then, Coupang emerged as a major player with its overnight delivery service that lured masses of consumers from offline stores to online platforms amid the COVID-19 pandemic.

Naver, the country's largest portal site operator, is also in direct competition with Coupang with its open market service.

But when it comes to number of users, YouTube comes out ahead of them.

According to the mobile application analysis platform Mobile Index, in May YouTube had 32.94 million MAU, followed by Naver with 29.91 million and Coupang with 13.86 million.

YouTube has already dominated Naver when it comes to online streaming. Now Naver's shopping platform business is being threatened by YouTube.

The American video sharing platform has not earnestly started its e-commerce business yet. But industry insiders believe it is only a matter of time before it takes over the domestic online shopping business.

"Naver also started its e-commerce business as a broker rather than operating a platform. Without a doubt, YouTube will develop a new system for online shopping in some form, which is a clear source of revenue," said Lee Sang-woo, a media professor at Yonsei University.

Naver also said it expects major global firms to enter the domestic online shopping business and that the competition here is likely to get fiercer.

Naver, Coupang and eBay are in fierce competition in the e-commerce sector. According to Mirae Asset Daewoo, Naver took the lead with a market share of 14 percent, followed by Coupang with 12 percent and eBay with 11 percent. EBay Korea operates Auction and Gmarket here.


Kim Jae-heun jhkim@koreatimes.co.kr

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