Well-Raised 'Naver Sonjadeul'... Leading Future Growth

[Asia Economy Reporter Kang Nahum] Naver's subsidiary companies are gaining attention as new growth engines for Naver by successfully attracting investments one after another. These companies are developing customized content targeting the MZ generation (a compound term for Millennials and Generation Z born between the 1980s and 2000s) and are expanding their reach to global markets.

◆ Resale Market Sensation ‘KREAM’= According to Naver on the 30th, ‘KREAM,’ a limited-edition resale (secondhand trading) platform spun off from the subsidiary Snow earlier this year, recently secured a Series A investment worth 20 billion KRW from venture capitalists (VCs) such as SoftBank Ventures and Altos Ventures. Since its spin-off, the total accumulated investment raised amounts to approximately 40 billion KRW.

Launched in March last year, KREAM is a C2C transaction brokerage platform based on new trends spreading among the MZ generation. Resale refers to the consumption method of reselling purchased new products to secure price differences. This method offers the MZ generation an opportunity for value-driven consumption at reasonable prices, a chance to acquire cost-effective items, and a means of investment.

KREAM is expanding its business by targeting the characteristics of the MZ generation, who prefer discovering and using items that express their tastes rather than owning many new products. It records a high average monthly transaction growth rate of 121% compared to the previous month, and the cumulative transaction amount surpassed 270 billion KRW within one year of its launch.

Kim Changwook, CEO of KREAM, said, "This investment is part of infrastructure expansion, including the development and introduction of an AI-based authentic product verification system and the expansion of product categories." He added, "We will continue to advance our transaction model and provide differentiated services so that anyone can easily and comfortably trade limited-edition products."

◆ Metaverse Pioneer ‘ZEPETO’= Amid the global craze for the ‘metaverse’ (3D virtual world), ‘ZEPETO,’ created by Naver’s subsidiary Naver Z, is leading this market domestically.

ZEPETO is an AR avatar service targeting Generation Z, allowing users to enjoy social activities with their uniquely customized 3D avatars using face recognition, AR, and 3D technologies. Users can also create and sell AR avatar clothing.

Since spinning off from Snow in May last year, Naver Z has actively partnered with various global IP operators, gathering the global Generation Z on ZEPETO. As of last month, ZEPETO’s global user base exceeded 200 million, with 90% of users overseas and 80% in their teens, establishing it as a popular playground for Generation Z in the metaverse era.

Last year, it attracted investments from domestic entertainment companies such as Big Hit (HYBE) with 7 billion KRW, JYP with 5 billion KRW, and YG with 5 billion KRW. Recently, it partnered with the luxury brand ‘Gucci’ to officially launch various fashion items and a 3D world map utilizing Gucci’s IP on ZEPETO.

Kim Daewook, co-CEO of Naver Z, stated, "We will strive to offer ZEPETO users more differentiated enjoyment amid the global metaverse trend." He added, "We will continue to create new value in the boundless virtual world through sustainable collaborations with various global IPs."

◆ Global No.1 English Conversation App ‘CAKE’= CAKE, an English conversation education app operator that became a Naver subsidiary after spinning off from Snow in October last year, has recently succeeded in raising 10 billion KRW in investment, solidifying its position in the global market. The investor is Milestone Growth Partners, an investment company affiliated with IS Holdings, which received 20,000 preferred shares of CAKE through this investment.

CAKE started its service in South Korea in March 2018 and launched its global service in October 2019, showing rapid growth. Within one year of its launch, it surpassed 50 million downloads worldwide, becoming the global No.1 English education app.

It is gaining recognition among the global 20-30s generation interested in studying English, mainly through curated short-form learning content featuring native speakers’ videos. The app is available in 13 languages, including Korean, and is widely used as an English learning app in countries where these languages are spoken.

The market outlook is also bright. According to global market research firm QY Research, the global language learning app market size is expected to grow from $1.39085 billion in 2019 to $3.67448 billion by 2025.

A CAKE representative said, "Based on competitive content and high usability, we plan to add French, Italian, and German services in the future and launch services in the European region as well."

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