[Concall] Naver to Launch 'Smart Channel' Advertising Product in Q2 (Comprehensive)

Increase in Naver Pay and Band Users Due to Untact Expansion in Q1

Hansung-sook, CEO of Naver

[Asia Economy Reporter Jin-kyu Lee] Naver is launching a new advertising product called 'Smart Channel' in the second quarter to counter the prolonged impact of the novel coronavirus disease (COVID-19). In the first quarter, the spread of non-face-to-face (untact) culture due to COVID-19 led to strong performances in online shopping and webtoons, achieving both external growth and profitability improvement simultaneously.

Han Seong-sook, CEO of Naver, said during a conference call held after the announcement of the first quarter 2020 earnings on the 23rd, "We are reorganizing the product system to respond to changes in the online marketing environment caused by COVID-19," adding, "We plan to pilot the Smart Channel, which we have been preparing since last year, next month."

The Smart Channel has the advantage of being exposed in the top main area of mobile, which attracts high attention. Naver expects that through the Smart Channel, it will be able to imprint the premium image of advertising brands on consumers. CEO Han said, "Advertisers will be able to select Naver tools according to their marketing objectives, and consumers will be able to appropriately choose products based on their interests," adding, "Starting with the Smart Channel, we will introduce advertising products that meet market expectations."

Naver also plans to expand the online shopping sector, including 'Brand Store,' in the second quarter to generate revenue. CEO Han stated, "In the first quarter of this year, 30 Brand Stores were opened, and we aim to open 200 this year." Furthermore, Naver plans to capture the growing remote work market due to the spread of COVID-19. CEO Han said, "We will build cloud-based call centers from finance to public institutions," and added, "In the second half of the year, based on Clova, we will integrate AI solutions capable of reservation and task processing to capture the newly formed market after COVID-19."

Meanwhile, despite the impact of COVID-19 in the first quarter, Naver was able to avoid revenue losses thanks to the expansion of untact culture, increased online shopping, and expanded use of content and social networking services (SNS). In particular, as online shopping increased, Naver Pay users also grew significantly. CEO Han emphasized, "Naver Pay transaction volume increased by 46% year-on-year, surpassing 5 trillion won in a quarter for the first time," adding, "In the first quarter, we focused on securing merchants and will expand mainly offline in the future."

She also explained, "The untact culture increased users of communities and portal sites," noting, "The number of daily live broadcasts on Naver Band increased 40 times domestically and 20 times in the U.S., and the daily active users (DAU) among teenagers rose from 130,000 last year to 660,000 recently." Thanks to the strong performance of online shopping and Naver Pay, Naver announced that its first quarter sales reached 1.7321 trillion won, a 14.6% increase from 1.5109 trillion won the previous year, and operating profit was 221.5 billion won, a 7.4% increase from 206.2 billion won in the same period last year.

This content was produced with the assistance of AI translation services.