Naver and Kakao Overcome COVID-19, Continue Leap in 'e-Commerce'

Naver Expands Business Based on No.1 Domestic Portal Market Influence
Kakao Offers Specialized Services Linked with National Messenger 'KakaoTalk'

[Asia Economy Reporter Jin-gyu Lee] Naver and Kakao, which have overcome the impact of the spread of the novel coronavirus infection (COVID-19), are continuing their momentum by strengthening their 'e-commerce' businesses. As the untact culture spreads, Naver is expected to leverage its powerful influence in the domestic portal market, while Kakao will accelerate its e-commerce market penetration based on the national messenger 'KakaoTalk (KakaoTalk)'.

According to the IT industry on the 9th, Naver has been expanding its e-commerce business since the beginning of this year, led by 'Brand Store', which partners with large corporations and famous brands, and the 'Live Commerce' feature where shopping sellers introduce products through online broadcasts. Having succeeded in external growth and profitability improvement in the first quarter, Naver plans to expand its online shopping business in the second quarter by promoting Brand Stores and other initiatives to improve performance.

Han Seong-sook, CEO of Naver, said at the first-quarter earnings conference call on the 23rd of last month, "We opened 30 Brand Stores in the first quarter of this year and aim to open 200 by the end of the year," adding, "We will also seek cooperation plans with logistics companies to respond to different delivery needs such as daily necessities and furniture." Naver opened Brand Stores in February, creating categories that allow large corporations and specific brands to directly enter Naver. Naver also expects an increase in transaction volume of its simple payment service 'Naver Pay' through the expansion of its online shopping business. Kim So-hye, a researcher at Hanwha Investment & Securities, explained, "The growth trend of Naver Shopping and Pay transaction volume will continue in the second quarter," and "The number of new buyers on Naver Shopping is rapidly increasing, and the number of Naver Pay users aged 50 and above has increased by 53% compared to the previous year."

Kakao, which achieved the highest quarterly sales and operating profit in the first quarter, also expressed its intention to strengthen its e-commerce business led by the KakaoTalk service. Despite the COVID-19 crisis, Kakao Commerce's first-quarter transaction volume, including 'KakaoTalk Gift' and 'Talk Store', increased by 55% compared to the same period last year as KakaoTalk usage surged with the spread of untact culture. Kakao plans to accelerate the strengthening of its commerce sector business by linking with other KakaoTalk services. The strategy is to lead users attracted through the KakaoTalk business model 'Talk Biz' to commerce.

Yeo Min-soo, co-CEO of Kakao, said at a conference call on the 7th, "Due to the impact of COVID-19, delivery gifts related to health, hygiene, and indoor activities have increased, expanding the use of the gift service not only for exchanges but also for delivery gifts," adding, "Thanks to the popularity of the new service 'Talk Deal', the transaction volume of Talk Store in the first quarter expanded fivefold compared to the same period last year, adding new growth momentum to Kakao Commerce." Bae Jae-hyun, Chief Investment Officer (CIO) of Kakao, said, "Although existing e-commerce companies are showing aggressive moves due to expectations for online shopping, Kakao is positioning itself with specialized services by organically combining with KakaoTalk, thus escaping direct competition."

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