Naver becomes top online shopping service in S. Korea
SEOUL, AJU - Naver, a top web service operator in South Korea, has become an online shopping behemoth thanks to its digital wallet service that offers big shopping reward points and other benefits for customers and retailers.
According to Wiseapp, a mobile market research company, payment transactions worth 20.9 trillion won ($17.2 billion) were made on Naver's online shopping service "Smartstore" last year, topping the list of top players in South Korea's online shopping industry. Coupang, known as the South Korean version of Amazon, came second with 17 trillion won, followed by eBay Korea with 16.90 trillion won.
Naver began its online shopping service that connects customers and retailers in 2012. The service has been popular in the last five years since Naver offered a hefty amount of shopping points for shoppers using Naver Pay, a digital wallet service. Customers can use rewards when they go on online shopping next time or use Naver's online music and entertainment services.
"I use my Naver shopping rewards for ebook and webcomics services. It became a new habit for me to look for retailers that give large reward points when I go shopping through Naver's online stores," Kim Ji-hoon, a 38-year-old businessman, told Aju News.
Naver's online shopping collected greater popularity in the first quarter of this year as consumers chose to stay at home and make online orders for daily necessities due to a COVID-19 pandemic. About 5.8 trillion won of payment transactions were made using Naver Pay during the first half of this year, up 81.2 percent from two years ago.
Currently, there are about 800 million items listed on Naver's online shopping service, compared to Coupang's 300 million. There are about 3200,000 retailers selling items through Naver. Consumers can search for products using Naver's web portal and items will be curated to match shoppers' preference using artificial intelligence (AI)-based search logic.
In an effort to firm its foothold, Naver unleashed a premium subscription service in June to provide extra shopping reward points and other benefits such as online music streaming and cloud file storage for a flat fee rate of 4,900 won a month.
Normally, online shoppers using Naver Pay gets about one percent of their total transaction as reward points. By using the premium subscription, they will be given an additional four percent reward points. Naver has told users that the premium service would be useful for online shoppers who make a total monthly transaction of more than 200,000 won.
Along with a convenient place to shop, Naver also made stores a seller-friendly zone with a minimum fee of about four percent. Other online shopping malls require retailers to pay a fee of up to 25 percent of monthly sales.