Naver Corp. and Shinsegae Group revealed they had formed a partnership to reinforce their standing in the ever-changing e-commerce industry. Recently, the e-commerce giant Coupang successfully debuted on the New York Stock Exchange, experiencing a significant jump in its shares. After Coupang’s US listing, Naver and Shinsegae plan to combine their business capabilities and compete in the growing e-commerce web.
The two South Korean firms signed a stock swap agreement to accelerate their business expansions into online and physical retail. Under the 250 billion won ($221 million) share-swap deal, Naver will acquire stocks from two Shinsegae divisions. Specifically, Naver will obtain $132.5 million worth of shares from the Shinsegae-operated E-Mart, the largest South Korean retail store chain. Naver will also purchase stocks worth 99.5 trillion won ($88 million) from Shinsegae International, Shinsegae’s shopping platform, which distributes and manufactures luxury goods.
“We plan to build a strong collaboration system that encompasses all areas of distribution, including commerce, logistics, and new businesses through the share swap,” said a Shinsegae Group official. Similarly, Shinsegae and E-Mart will buy Naver shares worth $221 million, acquiring a combined 0.4% stake in the tech company. Since January, the two sides have discussed e-commerce cooperation after Shinsegae’s Vice Chairman met with Naver’s Global Investment Officer. Aside from forming e-commerce synergy, Shinsegae and Naver will continue exchanging shares to solidify their collaboration.
E-Commerce Cooperation Network
As part of the deal, the two companies will develop their logistics competence, create premium memberships, and establish new services. Moreover, E-mart will add its products to Naver’s online shopping platform, leading to Naver users visiting E-Mart’s site.
Meanwhile, Naver will broaden its product lineup with E-Mart’s support and extend its smartphone payment service operation to E-Mart’s stores.
Through the strategic partnership, both companies plan to launch a delivery service by incorporating Naver’s capabilities and E-Mart’s logistics expertise.
“Our goal is to increase user satisfaction by ensuring fast delivery on the same day and next day through company cooperation, and to increase seller reliability with data-based demand forecasting and inventory placement solutions,” said a Naver official.
Shinsegae and Naver also aim to establish an online store for beauty and fashion services using both companies’ shopping technologies. On top of the user-centered e-commerce collaboration, Naver will apply its AI and other robot-related technologies to Shinsegae’s distribution platforms. Additionally, Naver and Shinsegae aim to support small and medium-sized businesses and sellers’ growth through the tie-up.
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