Live Commerce Battle for No.1, Naver and Kakao Say "It's Me"

[Asia Economy Reporter Kang Nahum] As the non-face-to-face (untact) consumption culture spreads, the live commerce market is rapidly expanding, intensifying the competition between Naver and Kakao to dominate this market. It is also noteworthy that the two companies are targeting the market with different strategies.

◆ Growing into a 10 trillion won market within 2 years = According to related industries and securities firms on the 25th, the domestic live commerce market size is estimated to reach 2.8 trillion won this year. With the untact trend gradually strengthening and both sellers and consumers increasing demand for non-face-to-face connections, the industry expects this market to grow to 10 trillion won by 2023, two years from now.

The industry views this market as having shifted to a ‘duopoly system’ between Naver and Kakao. An industry insider said, "Since they own the largest portal site and messenger in Korea, it is difficult to find a platform that can beat these two companies in terms of accessibility," adding, "It is estimated that the market share held by Naver and Kakao has probably exceeded half."

Naver’s ‘Naver Shopping Live’ recorded a cumulative 170 million views and about 1.7 million cumulative buyers in the first quarter of this year. Kakao Commerce’s ‘Kakao Shopping Live’ surpassed 50 million cumulative viewers within one year of service launch, and the average transaction amount per broadcast per brand reached 100 million won, showing the highest efficiency among domestic live commerce platforms.

◆ Naver targets SMEs with technology = The operating strategies of the two companies are completely different. First, Naver, which operates ‘Naver Shopping Live,’ pursues an SME (small and medium-sized enterprises) friendly strategy. It provides services that allow sellers to autonomously operate live commerce through live functions and easy integration.

Representative service features of Naver Shopping Live include real-time chat with customers, pre-tagging of products (linked with Smart Store), URL sharing, setting to receive news from the store, push notifications sent to regular customers before broadcasts, and live statistics reports.

Since anyone can conveniently conduct live broadcasts with just a smartphone without separate studios or professional equipment, it is more convenient for sellers compared to other commerce platforms that require large equipment or studio visits for live broadcasts.

Naver operates dedicated studios for SMEs participating in Shopping Live and enhances benefits for both viewers and sellers based on high-level video technology such as ‘real-time’ implementation through ultra-low latency playback technology advancement. Currently, SMEs account for 85% of all sellers on Naver Shopping Live.

A Naver official explained, "We are the only platform providing technology that allows small sellers and SMEs, who were generally excluded from the live commerce market mainly open to large brands, to cross the threshold."

◆ Kakao directly manages planning, filming, and broadcasting = Kakao’s strategy is ‘selection and concentration.’ Before launching Kakao Shopping Live, Kakao Commerce established a dedicated team and its own studio to build differentiated content planning and production capabilities.

Currently, all broadcasts of Kakao Shopping Live are produced in a studio located within the office, with Kakao Commerce managing everything from planning to filming and broadcasting, providing more professional broadcasts to customers. Under this thorough planning by Kakao Commerce, broadcasts are scheduled only five times a day.

The ability to utilize the national messenger ‘KakaoTalk’ is another strength of Kakao Shopping Live. Using KakaoTalk group chats, two-way communication between sellers and customers is possible. Viewers can inquire about products in real time during broadcasts and receive immediate answers.

Accessibility is also high. In March, a separate ‘Kakao Shopping’ tab was created within KakaoTalk to place Kakao Shopping Live, enhancing accessibility. Additionally, broadcasts are streamed through Kakao Shopping Live Talk Channel, Kakao Shopping, and Daum Mtop Shopping Tab.

A Kakao Commerce official said, "With services within KakaoTalk and the establishment of professional infrastructure, we are showing higher broadcast efficiency than any other commerce platform," adding, "Considering that the maximum number of broadcasts per day is five, the performance of Kakao Shopping Live over the past year is remarkable."