As competition heats up around the domestic e-commerce market worth 160 trillion won, Naver has launched a ‘logistics experiment’ to strengthen its delivery services. While emphasizing keywords like ‘fast’ and ‘fresh’ delivery, Naver is employing its unique collaboration strategy that differs from Coupang. It also plans to introduce a differentiated logistics system incorporating IT technologies such as artificial intelligence (AI).
‘Naver Logistics Alliance’ in Full Swing
According to Naver on the 8th, it will activate the ‘Naver Fulfillment Alliance (NFA)’ system within this month. It is a kind of logistics alliance. Fulfillment refers to integrated logistics management that handles everything from storing sellers’ products to packaging, shipping, and delivery according to orders. While Coupang operates its own logistics centers and expands the market with fast delivery (Rocket Delivery), Naver is also stepping up efforts to enhance delivery competitiveness.
Unlike Coupang, which handles delivery directly, Naver entrusts CJ Logistics, its ‘allied’ partner, and has created a collaborative system with various companies. Naver is also discussing the construction of mega logistics centers with CJ Logistics. In the NFA, major brand daily necessities will be handled by CJ Logistics, fresh food by E-Mart, large home appliances and furniture by Howser, and logistics for small business owners by the logistics platform company FSS. The plan is to increase the scale of fast delivery by 90 times by 2023.
Naver is also targeting the Dongdaemun fashion industry to pioneer new markets. Naver has built the ‘Dongdaemun Smart Logistics Solution’ for Dongdaemun fashion businesses and applied support programs, order forecasting, and logistics automation. Naver has collaborated with the Dongdaemun fashion platform Brandy to advance technology for improving order forecasting. Through this, Dongdaemun sellers will be able to accurately track the exact shipping and dispatch dates of ordered products. This will help coordinate delivery dates and assist in product manufacturing, order management, and delivery management.
In fact, the 400 participants in the Dongdaemun logistics experiment saw a 55% increase in transaction volume (as of April) compared to the previous year. Kim Hana, leader of Naver’s Business Development Office, explained, "Once the Dongdaemun logistics solution is established, it will create an environment where various creators, small and medium enterprises (SMEs), and influencers can easily start online businesses based on the Dongdaemun fashion market, thereby revitalizing the Dongdaemun fashion market."
Order Forecasting with ‘AI Logistics’
Naver has also applied IT technology to logistics. Together with CJ Logistics, Naver has started AI logistics experiments at fulfillment centers in Gunpo and Yongin following Gyeonggi Gonjiam. Naver’s AI ‘Clova Forecast’ predicts Naver Shopping order volumes one day in advance, helping optimize workforce allocation and operational efficiency at logistics centers. The prediction accuracy is 95%. Naver is also piloting unmanned mobile robots to assist with logistics operations.
Naver plans to introduce diversified logistics systems according to product characteristics. For ‘neighborhood market shopping’ deliveries, it is refining segmented delivery systems tailored to each local traditional market in collaboration with logistics startups such as ‘Ssaenggakdaero’ and ‘Boorung’. For large home appliances and furniture, Naver is discussing with partners to enable designated delivery on desired dates and premium delivery services for high-priced products.
Through fulfillment delivery and other services, Naver aims to grow Smart Store transaction volume to 25 trillion won this year. Last year’s transaction volume was around 17 trillion won. Kim Pyungsong, senior leader of Naver’s Business Development Office, said, "By combining Naver’s AI technology with the capabilities of various industry partners including CJ Logistics, we are striving to provide diverse delivery services tailored to the characteristics of sellers and products. Through this, we plan to support SMEs so they can operate their businesses without worrying about logistics."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
