"Dominating Online and Offline Distribution Markets"…Key Points of Shinsegae and Naver Alliance (Comprehensive)

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Signing Ceremony of Business Partnership Agreement between Shinsegae Group and Naver.

[Asia Economy Reporter Yuri Kim] Shinsegae Group and Naver (NAVER) have formed an 'alliance' to engage in comprehensive online and offline cooperation. The two companies will conduct a share swap worth 250 billion KRW to this end.

On the 16th, Shinsegae Group announced that key executives from both companies, including Kang Hee-seok, CEO of Emart, Cha Jeong-ho, CEO of Shinsegae Department Store, Han Seong-suk, CEO of Naver, and Choi In-hyeok, CEO of Naver Financial, met at the JW Marriott Hotel in Seocho-gu, Seoul, to sign a business agreement aimed at strengthening comprehensive cooperation in commerce, logistics, membership, and mutual growth.

Through this agreement, Shinsegae Group and Naver plan to dominate the online and offline distribution market. The number of users for Shinsegae Group and Naver reaches 20 million and 54 million, respectively. By combining forces, they will secure 450,000 sellers, a nationwide logistics network capable of immediate, same-day, and dawn delivery, and over 7,300 offline hubs.

Shinsegae Group will strengthen ties and trust between the two companies through mutual share exchange with Naver. The share swap will be conducted with Emart at 150 billion KRW and Shinsegae Department Store at 100 billion KRW. Emart will exchange 824,176 treasury shares (2.96% stake) for 389,106 Naver shares (0.24% stake), and Shinsegae will swap 488,998 shares (6.85% stake) of Shinsegae International for 259,404 Naver shares (0.16% stake).

Shinsegae Group and Naver will strengthen cooperation across all areas of the distribution industry through this business agreement, including ▲expansion of online and offline commerce ▲enhancement of logistics competitiveness ▲discovery of new services based on new technologies ▲growth of small and medium sellers. The strengths of Shinsegae Group, such as Emart’s grocery shopping and Shinsegae Department Store’s fashion, beauty, and luxury goods, will combine with Naver’s online platform to create synergy.

Emart, the offline market leader, will connect its grocery shopping capabilities with Naver’s platform through services like 'Naver Grocery Shopping.' Utilizing the fashion and beauty assets and product planning capabilities of Shinsegae Department Store and Shinsegae International, they also plan to build a 'luxury platform' together with Naver. For example, new product launch shows of luxury brands owned by Shinsegae International will be unveiled through Naver live commerce. They are also discussing providing premium services to customers by linking Shinsegae Department Store’s VIP club membership service with Naver, including premium delivery and online one-on-one personal shopper services.

Shinsegae Group plans to accelerate nationwide fulfillment and last-mile service expansion by linking its nationwide logistics network with Naver’s logistics partners. Through cooperation with over 7,300 offline hubs nationwide, including three NE.O online stores, Emart, and Shinsegae Department Store, as well as Naver’s logistics partners, they are discussing implementing optimal delivery services such as immediate delivery within 2-3 hours after ordering, in addition to current dawn and same-day delivery services. When an online order is placed, various Naver logistics partners will pick up products from Emart’s P.P (Picking & Packing) centers acting as logistics hubs and deliver them to customers within 2-3 hours. Joint new investments related to logistics by both companies are also under consideration. A Naver official said, "The goal is to guarantee fast delivery to increase user satisfaction and enhance seller trust through data-based demand forecasting and inventory placement solutions."

The two companies are planning differentiated services such as ▲bringing online users to offline stores using Naver Pay, smart map services, and receipt reviews ▲expanding Naver Smart Order, already applied at Starbucks ▲indoor augmented reality (AR) navigation in large stores combined with AI product recommendations ▲and services like navigation, parking payment, and robot concierge using Naver Labs technology.

Shinsegae Group and Naver are also discussing integrated benefits for Shinsegae Points and Naver Plus Membership. Customers will be able to use and accumulate Naver Pay at Shinsegae Group businesses such as Emart, Shinsegae Department Store, SSG.com, and Starfield, and they are exploring ways to provide more benefits to customers through linking Shinsegae Points and Naver Plus Membership.

Leveraging Shinsegae Group’s branding and marketing capabilities, they plan to provide customized support for Naver’s small and medium sellers to grow through product sales, branding, and marketing. They will offer opportunities for excellent Naver Shopping small and medium sellers to sell their products at Shinsegae Group’s offline stores such as Emart, Shinsegae Department Store, and Starfield, and will lead the establishment of a co-growth model with small and medium sellers by discovering local specialties and handcrafted products and developing them into Shinsegae Group’s own brand products.

Han Seong-suk, CEO of Naver, said, "As this is a collaboration between Naver and Shinsegae, each with the best capabilities online and offline, both users and sellers can look forward to shopping experiences and various commerce business opportunities that were previously unimaginable. We will present a cooperation case that breaks the prejudice that neighborhood markets and large supermarkets cannot coexist and introduce a new model that grows together with small and medium enterprises (SMEs) in various fields."

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