Naver Corp., the operator of South Korea’s top search engine, plans to build up its online and offline shopping businesses during this year’s second half. To this end, Naver teamed up with Shinsegae Group, one of the country’s leading retail companies.
Naver CEO Han Seong-Sook stated that Naver and Shinsegae’s latest move would place grocery shopping service as its top priority. Accordingly, Han announced that the two companies would cooperate to enhance each other’s retail operations during 2021’s fourth quarter.
Commercializing Local Meal Kits
In particular, E-mart Inc., Shinsegae’s discount store chain and the country’s largest retailer, would produce and commercialize sought-after food items available on Naver’s Food Window platform. Food Window offers local farmer products and restaurant meal kits in small-scale, limited amounts.
According to Naver, the local food item commercialization would enable smaller businesses to experience a significant increase in sales. Over the recent months, especially with the ongoing health crisis, meal kit sales in South Korea have rapidly grown.
E-mart also said that its meal kit sales in 2021’s first half massively jumped by 229.4% compared to the same period in 2020. Meanwhile, E-mart’s Peacock Product Development Team would review, manage, and implement the Naver local-themed meal kit commercialization initiative.
Since its launch in 2013, the Peacock brand cultivated E-mart’s home meal replacement sector, establishing a solid domestic market footing. E-mart also noted that Peacock holds an extensive, successful track record in transforming local restaurant food products into meal kits.
Expanding Retail Networks
In return, Naver would welcome E-mart into Naver Shopping, the country’s largest online shopping platform, this year. As a result, the move would enable shoppers currently using Shinsegae’s SSG.COM to buy E-mart grocery products using Naver Shopping.
Moreover, Naver’s shopping platform supports a 40-million monthly active user base, around ten times bigger than that of SSG.COM. Naver Shopping also accumulated the largest transaction amount in 2020 at more than 28 trillion won ($24.3 billion).
Thanks to its Shinsegae alliance, Naver could further strengthen its fresh goods and grocery sector and expand its retail networks. Besides creating synergy, Naver’s CEO said that the two companies’ strategic partnership would improve their online and offline commerce operations.
Furthermore, the two e-commerce giants’ newest meal kit effort marks their first cooperation since beginning a share-swap deal in March. Previously, Naver and Shinsegae signed a 250-billion won ($221 million) share-swap agreement to accelerate the next-generation e-commerce network.
Venturing Into Other Retail Areas
Naver also plans to boost its luxury goods business by introducing Shinsegae Department Store luxury-brand outlets to Naver Shopping. Other Naver shopping business upgrades include launching product subscriptions, offering long-term payment plans, and setting up rental services.
The Naver-Shinsegae collaboration would also venture into logistics and product distribution. Naver would utilize Shinsegae’s expansive nationwide logistics channel, which holds over 7,300 offline distribution networks.
Shinsegae shared that its investment in logistics with Naver also aims to tackle other retail technology areas. Additionally, Shinsegae recently formed a consortium with Naver as part of the final bidding to acquire eBay.
