Korean "Shopify" vs Korean "Amazon"? Korean e-commerce giant Naver announced that it will launch the Shopify model

As the two largest e-commerce platforms in South Korea, Naver and Coupang have been competing for who is the real No. 1 e-commerce company in South Korea.

According to the industry on the 13th, Lee Yoon-sook, CEO of Forest CIC, which is responsible for Naver's shopping business, recently said in an investment briefing for institutional investors : " Naver will expand its business model similar to Shopify . "

This also means that Naver will take a different development path from Coupang, which introduced the "Amazon model". Therefore, it can be predicted that Naver and Coupang may form a pattern similar to " Shopify vs. Amazon" in the future.

Naver: Supporting Small and Medium Sellers

Shopify is a business-to-business (B2B) business with sellers as its main customers . Its total market value is about 150 billion U.S. dollars (about 170 trillion won), which is less than one-tenth of Amazon (1.7 trillion U.S. dollars). However, during last year's Black Friday, it surpassed Amazon (4.8 billion U.S. dollars) with a transaction volume of 5.1 billion U.S. dollars, becoming a clear competitor .

Like Shopify, Naver also focuses on small and medium-sized sellers , and its most representative product is the "merchant solution" for smart stores .

Naver CEO Han Sung-sook said in a letter to shareholders late last month: " Naver 's role is to allow small and medium-sized business sellers to focus on their business . Naver will provide all the steps, starting from the initial store building to expanding to a full range of tools such as customer management, settlement and finance, and data analysis. "

In other words, Naver plans to make the smart store a platform that helps sellers accumulate their own brands, rather than a simple e-commerce platform . This is not a simple open market, but a platform that can help sellers build their own brands.

Naver aims to increase the number of sellers in its smart stores from the current 410,000 to more than 1 million in five years through this method . Last year, Naver’s smart stores generated transactions worth about 17.2 trillion won, up 58% from the previous year (10.2 trillion won), and are the main growth driver of Naver ’s shopping business.

Some sellers may turn to Naver

In contrast, Coupang, a strong competitor to Naver, has a policy that focuses more on consumers than sellers .

Currently, 70% of South Korea's population lives within 7 miles (about 11 kilometers) of a Coupang warehouse , and since Coupang went public , it has announced several large-scale logistics distribution center plans in succession to meet the needs of all the population. In addition, Coupang has also launched a "product winner" system that enables the seller with the lowest bid to write a product description or review of the same seller, causing fierce competition among sellers.

Therefore, facing the fact that Naver will expand its business model similar to Shopify , it is very likely that the original Coupang sellers will turn to Naver, and there is already a precedent for this situation.

A seller who created a women's clothing store on Naver's smart store at the beginning of this year said : " Unlike Coupang , Naver can directly decide sales methods such as price and delivery, so I chose it . " The famous Korean beauty company LG H&H ( LG Household & Health Care ) stopped selling Coupang as early as 2019 and opened a brand store on Naver the following year.

But in general, as the two giants of Korean e-commerce, these two platforms have their own advantages and characteristics. Whether to choose them depends on which aspect the sellers prefer!

Shopify

Seller

South Korea