Logistics Industry on Alert as Naver Teams Up with CJ Logistics | Be Korea-savvy

Logistics Industry on Alert as Naver Teams Up with CJ Logistics


Naver Corp.'s headquarters in Seongnam, Gyeonggi Province. (Image: Naver)

Naver Corp.’s headquarters in Seongnam, Gyeonggi Province. (Image: Naver)

SEOUL, Oct. 28 (Korea Bizwire)The South Korean retail industry is eyeing country’s top online portal operator Naver and entertainment and logistics giant CJ Group as the two companies are exchanging company shares worth 600 billion won ($531 million) as part of a strategic partnership in the fields of cultural content and distribution.

Industry watchers expect that Naver, a newly emerging competitor in the online shopping business, will utilize a distribution system run by CJ Logistics Corp., the logistics unit of CJ Group, to boost its competitiveness in the delivery market.

“Naver has recently been showing interest in logistics by investing in motorcycle delivery businesses,” said a source from a local shopping mall.

“Naver’s business model usually involves collecting commissions, which leads us to believe that the company will take a similar approach to logistics as well.”

“Naver Pay’s security and convenience, coupled with the new delivery system, will maximize a lock-in effect among consumers, warranting attention from the industry,” said a different source from an open market business.

This strategic partnership involves not only logistics firms, but also content platforms such as CJ ENM and Studio Dragon, hinting at the possible emergence of a Korean version of Amazon Prime, a subscription-based shopping membership.

Amazon Prime offers quick, free delivery combined with online streaming services.

This Sept. 23, 2020, file photo shows CJ Logistics workers busy at a terminal in Gimpo, outside of Seoul, ahead of the annual Chuseok holiday. (Yonhap)

This Sept. 23, 2020, file photo shows CJ Logistics workers busy at a terminal in Gimpo, outside of Seoul, ahead of the annual Chuseok holiday. (Yonhap)

Naver, too, has already introduced a similar Naver Plus Membership, which now has the tools to ensure better distribution of content as well as rapid delivery based on the strategic partnership.

Coupang, Naver Shopping’s major competitor, has also hinted at tapping into the over-the-top (OTT) market, furthering speculation that this trend will gain momentum.

How much synergy the new partnership will generate in the delivery market, however, has yet to be determined.

While CJ Logistics’ Fulfillment System can enable Naver to offer quick delivery services similar to Coupang’s Rocket Delivery, it will require the company to engage in purchasing and managing stock.

“Naver might be able to offer early morning delivery services, but stock management will slow down the process,” said a source from a different shopping mall.

H. M. Kang (hmkang@koreabizwire.com)

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