Naver's '550,000 Smart Stores' Promote Growth of E-commerce Ecosystem

[Asia Economy Reporter Seungjin Lee] Naver has been found to contribute to market growth by increasing seller diversity in the e-commerce market through its Smart Store and seller support services.

Research teams led by Professor Geonwoong Lee of Korea University and Professor Boreum Choi of the University of Seoul analyzed on the 22nd the effects of increased diversity and ecosystem expansion brought about by Naver’s expansion of seller support solutions and services in the ‘D-Commerce Report 2022,’ published for the fifth time this year.

Naver has provided technological solutions offering tools needed at each stage of business, including Smart Store, which helps anyone build an online store even without technology or capital. Representative solutions include product management, marketing, order/payment, delivery/logistics, customer management, as well as financial support such as fast settlement, and data and statistical solutions.

As of December this year, 550,000 Naver Smart Stores are in operation, and the number of products has increased by more than 50% compared to the previous year. Based on seller and product diversity responding to users’ shopping demands, Smart Store transaction volume recorded a compound annual growth rate (CAGR) of 72% from 2015 to 2021.

The research team led by Professor Geonwoong Lee of Korea University stated that Naver’s steadily strengthened seller-friendly solutions and services not only increase seller diversity but also improve overall market efficiency.

According to the research results, as Naver’s ▲business ▲financial ▲operational support measures strengthen, the number of stores, transaction volume, and product order counts of young (ages 10-30) sellers, small city (non-metropolitan, non-special city) sellers, and small-scale sellers with annual sales under 300 million KRW show a relatively faster increase compared to non-young, large city, and large-scale sellers during the same period.

In particular, as Smart Store (detail pages) of young, regional, and small-scale sellers are viewed more by users, the total Smart Store product transaction volume and order counts also grew accordingly. In fact, the growth effect on transaction volume was about 2 to 3 times higher, and the order count growth effect was about 2 to 5 times higher compared to non-young, large city, and large-scale sellers, indicating that this leads to overall market growth and increased efficiency.

Furthermore, when young, small city, and small-scale sellers use Naver’s support services, their order counts were 2.8 to 3.1 times higher, and transaction volume was 2.8 to 3.0 times higher than those who did not use the services. Considering that the effect of support service use for non-young, large city, and large-scale sellers was 2.2 to 2.4 times for order counts and 2.3 to 2.4 times for transaction volume, this is a significantly higher level.

The research team led by Professor Boreum Choi of the University of Seoul’s College of Business Administration conducted a study on the business effectiveness enjoyed by Smart Store sellers depending on their use of Naver’s seller support services.

According to Professor Choi’s research team, using business services and solutions such as Shopping Live, Biz Advisor statistical tools, and Clova AI Commerce solutions increases sales by an average of 64.3%. In fact, ‘Store Setup,’ ‘Customer Management,’ and ‘Promotion Tools’ were the most used and highly rated by sellers, and sellers who used promotion tools within Smart Store such as ‘Store Wishlist’ and ‘Notification Coupons’ had a customer expansion effect 6.3 times higher than those who did not use them.

Additionally, sellers using financial support services such as fast settlement, business loans, and return assurance care had sales about 41.6% higher on average than non-users. In particular, sellers using fast settlement were analyzed to have secured 2.4 times more customers than non-users by receiving smooth cash flow support.

Professor Boreum Choi of the University of Seoul’s College of Business Administration said, “Sellers settle on platforms that help them stabilize and expand their business by comparing and analyzing each platform’s solutions and services through multi-homing. In the current e-commerce market accelerating digital transformation, Naver Smart Store’s practical effectiveness is high. The direction of Naver’s services, which supports sellers with low digital capabilities to easily utilize AI technology and enhance their digital capabilities, will contribute to increasing overall ecosystem diversity.”