South Korean retail giant E-Mart may form an alliance with South Korean IT giant Naver

Naver (the Korean version of Baidu + Taobao), which occupies more than 20% of South Korea's e-commerce market, has recently been filled with a sense of crisis.

According to the Korea Times, Naver's founder and global investment officer Lee Hae-jin and Shinsegae Group Vice Chairman Chung Young-jin held a joint meeting recently. Although the specific meeting information has not been confirmed, an official from Shinsegae Group said that they discussed areas of common interest where they can create synergies in their retail and e-commerce businesses.

Another industry source said Naver may seek cooperation by establishing a strategic partnership with Shinsegae Group or exchanging shares with the retail giant . The meeting between Jung Young-jin and Lee Hae-jin is seen as a preparatory step before the fierce competition with Coupang and 11st.

Shinsegae Group Vice Chairman Jung Young-jin (Photo: The Korea Times)

Coupang is reportedly going to go public in the first half of this year, and 11th Street has already established a business partnership with Amazon, the world's largest online retailer. It can be said that both Naver and SSG.com are facing huge pressure from these two platforms, so they met and discussed the possibility of cooperation.

E-Mart is a subsidiary of Shinsegae Group, and SSG.com is E-Mart's online business. The cooperation between the Korean retail giant and the Korean IT giant is likely to bring a dramatic change to the Korean e-commerce market .

Naver operates a C2C (consumer-to-consumer) online trading platform and has already recruited Chinese sellers . As of September last year , there were more than 380,000 dealers on Naver's shopping platform , accounting for more than 20% of South Korea's e-commerce market . The IT giant also has an online payment system called Naver Pay, which has an advantage over its competitors.

As of 2019, Shinsegae, South Korea’s largest retailer , had a gross merchandise value of 40 trillion won, twice that of Naver. However, E-Mart’s online business, SSG.com, had a gross merchandise value of just over 4 trillion won .

If the two sides can cooperate, Naver will be able to further consolidate its No. 1 position , and sellers settled in Naver will also be able to enjoy the consumer dividends brought by the TOP1 platform. At the same time, as a partner, S SG.com will also be able to increase its share in the Korean e-commerce market.

South Korea's online shopping market is growing at an astonishing rate. In 2019, the market reached 135 trillion won and was expected to exceed 160 trillion won last year. If the two companies finally achieve an alliance, the competition among South Korean e-commerce platforms will intensify again !

South Korea

Naver

retail