Naver's shift to direct delivery... Why now?

Non-member customers will only be able to receive products through 'Same-Day Delivery' as before. This measure is interpreted as part of Naver's strategy to strengthen the competitiveness of its own logistics services and differentiate membership benefits.

This indicates that Naver is expanding its strong influence in the e-commerce market. The growth of Smart Store is analyzed to be due to Naver's diverse delivery strategies and service improvement efforts.

In 2021, it formed the NFA (Naver Fulfillment Alliance) to build a cooperative system with various fulfillment startups, including CJ Logistics. This allowed Naver to provide fast delivery services without directly owning logistics assets.

Naver is pursuing a change where it secures logistics space directly, while logistics partners handle the actual operations. This appears to be an attempt to strengthen control over logistics while minimizing direct management of heavy assets. The main objective is to ensure consistent logistics quality and improve customer experience.

In the existing NFA alliance system, problems arose due to different operating methods and pricing structures among logistics partners. The inconsistency in logistics services experienced by customers due to various partners became a significant burden for Naver. To resolve these issues, Naver is moving towards direct logistics operations to standardize service quality.

Operating logistics centers directly entails massive fixed costs, in addition to real estate and equipment investments. While large companies offer stability and predictability, as seen with Coupang's logistics center part-timers, Naver will also face these fixed cost burdens by operating its own logistics centers. This could impact Naver's financial structure.

Naver's change in logistics strategy is not merely a service improvement but a major turning point that redefines Naver's role in the e-commerce market itself. Previously a brokerage platform operator, Naver is now securing direct control over logistics, strengthening its position as a primary contractor. This is expected to significantly impact the future competitive landscape with Coupang.

Coupang's active customer count in Q1 2024 hit a low, decreasing for two consecutive quarters to 23.9 million, a rare occurrence in Coupang's history that raised market concerns. However, it recovered to 24.7 million in Q2, regaining its previous high.

Coupang's domestic commerce growth rate, which was 18% before an incident, plummeted to 5% in Q1 of this year. While it recovered to 8% in Q2, this was still below the 10.1% growth rate of the overall domestic online shopping market during the same period. This marks the first time Coupang's usual pattern of always exceeding the market average growth rate has been broken, indicating a slowdown in its unique growth momentum.

Through this service, sellers can store their products in Coupang warehouses and ship them quickly via Rocket Delivery. As a result, the number of sellers on Coupang surged from 230,000 in 2023 to over 300,000 by the end of last year, significantly expanding product variety.

It aims for delivery within 1 hour of order by actively utilizing its nationwide network of small logistics hubs. This is interpreted as Coupang's strategy to innovate logistics by leveraging existing infrastructure and maximize delivery competitiveness.

In Q2 2024, 'hybrid mall' operators, which run both online and offline operations, recorded a growth rate of 14.5%. This surpasses the 8.8% growth rate of online-only operators and the 10.1% average growth rate of the online market. This demonstrates that an online and offline parallel strategy is currently an effective growth driver in the e-commerce market.

They are not only increasing sales but also rapidly growing operating profits, with the use of offline spaces as customer experience venues driving online sales becoming a successful recent trend.