Where Will the 700,000 Former Coupang Users Go?... Naver's Surge Shakes Up the E-commerce Landscape

Naver Leads Commerce-Driven Growth in Q1 This Year

Also Participates in Kurly's 33 Billion Won Paid-In Capital Increase

E-Commerce Market Leadership Battle Reignites

While Coupang's earnings for the first quarter of this year have significantly deteriorated in the aftermath of last year's personal data breach, Naver is accelerating its pursuit by leveraging "artificial intelligence (AI) commerce" and narrowing the gap.

According to the industry on May 6, Kurly has decided on a third-party paid-in capital increase worth 33 billion won, with Naver as the subscriber. The new shares to be issued are 498,882 common shares at an issue price of 66,148 won per share.

Naver plans to acquire all of the newly issued shares and further strengthen its partnership with Kurly. The issue price was determined through mutual agreement based on Kurly's most recent investment round. This implies an enterprise value of approximately 2.8 trillion won for Kurly. As a result, Naver's stake in Kurly will be expanded to 6.2%.

With this paid-in capital increase, Kurly will secure about 33 billion won in funds, which it plans to use as resources for expanding its logistics infrastructure and pursuing new businesses, laying the foundation for mid- to long-term growth.

Kurly and Naver entered into a strategic partnership in April last year, and in September of the same year, they opened "Kurly N Mart," an online grocery specialty store, on Naver Plus Store. Kurly's logistics subsidiary, Kurly Nextmile, also handles next-day delivery for products sold on Naver Smart Store and Brand Store.

As a result, Naver posted revenue of 3.2411 trillion won and operating profit of 541.8 billion won in the first quarter of this year, growing 16.3% and 7.2%, respectively. It is the first time since the company's founding that quarterly revenue has surpassed 3 trillion won, and the operating profit is also the highest ever for a first quarter. In particular, the platform division, which includes shopping, recorded revenue of 445.3 billion won, increasing by more than 30% and driving overall growth.

As some users left Coupang following the personal data breach incident, Naver has joined forces with companies like Kurly to build a Smart Store ecosystem, thereby attracting new customers through search-based channels, according to analysts.

According to Mobile Index by data analytics company IGAWorks, the number of monthly active users (MAU) for the Naver Plus Store (Neplus) shopping app reached a record high of 7.77 million last month. This is about a 9% increase from 7.1 million in February.

Naver's key differentiator is its "AI-based shopping experience." Naver has introduced an AI shopping agent that leverages users' search and purchase histories to enhance personalized recommendations. Since the introduction of this service, the number of users has increased by 20% and the volume of conversations by 40%, signaling a shift from a search-centered to a recommendation-centered shopping experience. Naver plans to further strengthen its strategy by adding a feature in the first half of the year that proactively suggests products to users, intervening from the exploration stage onward.

There are also signs of change in Naver's logistics strategy. Naver is considering expanding the proportion of "N Delivery," which has been operated based on partnerships, to around 50% in the future, and is also preparing a free shipping policy linked to its membership program. These moves, including potential direct investment, are seen as efforts to strengthen the delivery experience and address the logistics competitiveness that has long been considered a weakness.

There is also cautious speculation about the possible restructuring of the domestic e-commerce market. As of the end of 2024, Coupang (22.7%) slightly outpaced Naver (20.7%) in e-commerce transaction volume, but with Coupang's growth slowing and profitability declining, and Naver's profit-based growth continuing, the dynamics are changing. An industry representative stated, "The current e-commerce market is in a transitional phase, shifting from a single-operator monopoly structure to competition between platform and logistics models. Depending on how efficiently Naver converts inbound traffic into transactions and profits, there is ample potential for a shift in market leadership."

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