Rapid Surge in Mobile Gift Transactions
Naver's Transaction Volume in Last 3 Weeks
Soars 486% Year-on-Year
Kakao Sees 67% Increase in Same Period
Over 10,000 Attend Online Homecoming Event
Growth in Live Shopping and E-Commerce
Record High Q3 Performance Expected
[Asia Economy Reporters Bu Aeri and Lee Jinkyu] #Office worker Lee Ji-yeon (31) chose to send her regards via 'Naver Gift' instead of visiting her in-laws in Busan this Chuseok. Lee said, "I usually prepare gifts for my in-laws and deliver them in person during the holidays, but since I couldn't go this year, I ordered and sent gifts through mobile." Due to the impact of COVID-19, more people like Lee opted for 'remote hometown visits' (a newly coined term meaning visiting home online) this Chuseok, leading to a boom in the IT industry's 'mobile gifting' market.
Explosion in 'Gift' Chuseok Transaction Volume
According to Naver on the 25th, during the three weeks leading up to the Chuseok holiday, the transaction amount on 'Naver Gift' increased by 486% year-on-year, and the number of orders rose by 245%. This represents nearly a fivefold growth in just one year. Naver Gift recommends preferred gifts by gender and age based on its AI (artificial intelligence) personalized product recommendation technology called 'AiTEMS.' With the rise of non-face-to-face shopping due to COVID-19, it has become popular because the giver can avoid the hassle of visiting in person, and the recipient can reduce face-to-face contact.
Kim Kyun-hee, the leader in charge of Naver Gift, said, "This Chuseok, there is a trend of wanting to convey feelings to family, friends, and relatives non-face-to-face, so the use of mobile gifting has surged compared to the previous year." She added, "We expect the non-face-to-face culture to continue and will enhance the mobile gifting service to meet the diverse needs of users."
Kakao is also enjoying a significant Chuseok boost due to COVID-19. According to Kakao Commerce, during the three weeks before the Chuseok holiday, the transaction amount on 'Kakao Gift' increased by 67% year-on-year. Over 11,000 people participated in Kakao's recent 'Chuseok Remote Hometown Visit' event. In this event, users who cannot visit their hometowns during Chuseok leave comments such as "Grandfather, sorry I can't come down. I love you," and messages and gifts are delivered on their behalf.
Kakao noted a significant increase in users in their 50s this year. In the first half of this year, the transaction amount for Kakao Gift users aged 50 and above surged about 70% year-on-year, marking the highest growth rate among all age groups. A Kakao official explained, "Non-face-to-face gifting has become a trend for Chuseok gifts. Especially with the increase in users in their 50s, the customer base has broadened significantly."
Record Sales Expected Thanks to 'e-Commerce'
This remote hometown visit craze is also raising expectations for Naver and Kakao's performance. Naver's third-quarter revenue is projected at 1.96 trillion KRW, with an operating profit of 260 billion KRW. These figures represent a 17% and 28% increase year-on-year, respectively, marking the highest quarterly performance ever. The business platform segment, which includes shopping performance, is expected to generate about 820 billion KRW in third-quarter revenue, up approximately 14% year-on-year. The live shopping platform, which allows real-time communication with consumers while selling products, also played a key role. The number of sellers participating in Naver Shopping Live reached 350,000, a tenfold increase compared to March, and the amount of content increased about twelvefold during the same period.
Kakao is also expected to record third-quarter revenue in the 1 trillion KRW range, about 27% higher than the 783.2 billion KRW recorded in the same period last year. The 'Talk Biz' segment, which includes commerce businesses such as online shopping, saw third-quarter revenue rise to around 260 billion KRW, a roughly 60% increase year-on-year. Kakao Shopping Live, which allows KakaoTalk users to shop within chat windows, surpassed 1.16 million users just four months after its launch. The cumulative live view count exceeded 5 million.
Industry insiders expect Naver and Kakao's Chuseok shopping sales to indicate the future direction of e-commerce. An industry official said, "The trend of increasing non-face-to-face shopping due to the prolonged COVID-19 pandemic is expected to continue through the Chuseok peak season," adding, "This could lead Naver and Kakao to focus even more on their e-commerce businesses."
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