Naver Paid Services Webtoons, Shopping, and Various Benefits
Service Competition with eBay Korea, Coupang, and Others
[Asia Economy Reporter Jin-gyu Lee] As Naver launches its paid membership service, competition among e-commerce companies for paid membership services is intensifying.
According to the information technology (IT) industry on the 15th, as the spread of the novel coronavirus infection (COVID-19) has increased non-face-to-face (untact) consumption, e-commerce companies are actively working to attract loyal customers.
At the center of this is the paid membership service offering various benefits. Since this month, Naver has been providing the paid membership service 'Naver Plus.' Naver Plus is centered on offering shopping benefits and access to multiple contents and services such as Naver Webtoon, cloud, music, video, and audiobook services at an affordable price of 4,900 KRW per month. Users can also earn up to 5% of the amount paid via Naver Pay as points. Because the points can be used in various ways, the ability to use accumulated points again for shopping or various payments is considered an attractive feature.
eBay Korea, which was the first in the country to start a paid membership service, operates 'Smile Club,' which provides Smile Cash and free Smile Delivery services for an annual fee of 30,000 KRW. Coupang operates the 'Rocket Wow Club' at 2,900 KRW per month, offering differentiated services such as free Rocket Delivery and Rocket Fresh dawn delivery.
Lotte Group recently launched the integrated online mall application 'Lotte On' and is recruiting customers. Shinsegae's SSG.com also directly operates the SSG Pay business and plans to provide personalized services utilizing it. As offline demand shifts to e-commerce due to the COVID-19 situation, e-commerce companies are conducting various marketing efforts like these to increase loyal customers. According to the Ministry of Economy and Finance's March economic trend data, despite the contraction of private consumption due to COVID-19, online shopping sales increased by 27.4% in February.
There is also an observation that the increase in online shopping and simple payment methods can be an alternative to stimulate consumption. Thanks to fierce competition among e-commerce companies, customer benefits are being enhanced, serving as a catalyst to promote consumption and purchases. Since credit cards are already sufficiently widespread and saturated, simple payment services can lead new demand. An industry official said, "The recent membership wars among companies ultimately result in strengthening user benefits such as point accumulation, which will have a strong effect of stimulating consumers' purchasing psychology and increasing purchasing power," adding, "If the government effectively utilizes these private resources to support markets where private consumption occurs through policies, synergy with the New Deal policy can also be expected."
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