[Asia Economy Reporter Bu Aeri] Ryu Bohyun (53) has opened a Naver Smart Store called 'RG Co Shop' selling masks after retirement, generating a solid monthly revenue of 90 million KRW. Smart Store is a service that allows users to create an online shopping mall within Naver. The fact that it can be opened easily without large capital led Mr. Ryu to start a Smart Store business.
'Second Act' in Life through Smart Store
The number of people in their 50s starting Smart Store businesses like Mr. Ryu has recently increased significantly. This is a completely different trend from the past when retirees opened 'chicken restaurants' or 'bakeries.' Riding the wave of contactless (untact) trends, they are turning their attention to online startups. Song Jaehoon, Naver's Startup Growth Support Leader, said in an interview with Asia Economy on the 12th, "Since the outbreak of COVID-19, many people in their 50s have started their second act in life through Naver Smart Store startups." According to Naver, about 35,000 new Smart Stores are created monthly on average, with a total of 350,000 stores.
What stands out is the increase in people in their 50s. Naver's analysis shows that even those in their 50s, who mainly chose offline stores, have become accustomed to untact due to COVID-19, leading to more online startups. The number of new business owners in their 50s from March to July increased by 84% compared to the period just before COVID-19 (September last year to January this year).
Song explained that the increase in business owners in their 50s is partly due to the low entry barrier and Naver's platform technology. Compared to existing online shopping malls like Gmarket and Auction (with fees of 7-15%), Smart Store charges lower fees. Naver only charges a payment fee (3.74%) for individual business owners. The 'mall exposure problem,' a concern for business owners, is also helped by artificial intelligence (AI). Typically, internet shopping malls are exposed based on sales rank or popularity, which is a tough barrier for novice entrepreneurs starting their business. On the other hand, Naver applies an AI recommendation system tailored to users, increasing the chances that a newly started Smart Store will be exposed.
Mr. Ryu explained his startup background, saying, "I decided to start a business because it requires little investment and has a low entry barrier," adding, "Even people in their 50s are a generation that has handled computers at work, so the internet environment is not completely unfamiliar."
Naver's big data analysis tool 'Biz Advisor,' provided to small and medium-sized merchants, is also a strong support for entrepreneurs in their 50s. Biz Advisor organizes data helpful for business, such as customer behavior patterns within Smart Store. Song said, "It provides information such as which search terms users used to enter, and which age groups purchase what the most, so business owners can utilize it for their operations." In other words, the platform technology also provides a kind of management support function.
Naver and Small Businesses 'Win-Win'
The reason Naver puts effort into supporting small business startups is that mutual growth is possible through coexistence. For Naver, whose major income source is search advertising, small businesses are also major advertisers. When small business operations do well, advertising and search data increase, creating a virtuous cycle where Naver can also generate profits. In fact, Naver achieved record-high performance in the second quarter, thanks to growth in shopping and search advertising including Smart Store. It recorded sales of 1.9025 trillion KRW and operating profit of 230.6 billion KRW in the second quarter.
Naver plans to further expand online sales channels for small businesses through service diversification. Recently, it launched the 'Shopping Live' service, where small business owners introduce products directly via live broadcasts and real-time chat. At the end of August, it also plans to launch a 'Shopping Service' combining 'Neighborhood Market Shopping' and 'Department Store, Mart Shopping.' Song said, "Small businesses are Naver's most important partners," adding, "I want to hear that small businesses' livelihoods have improved because of Naver."
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