[Asia Economy Reporter Seungjin Lee] Naver has completed the acquisition of Poshmark, the largest fashion C2C (consumer-to-consumer) platform in North America. This move is seen as the starting signal for its full-scale entry into the C2C market. How much profit can Naver generate by building a global C2C portfolio connecting Korea, Japan, and Europe, centered on North America?
Naver's C2C Investments Show Results in Korea, Japan, and Europe
When Naver announced the acquisition of Poshmark, concerns about profitability caused its stock price to plunge, reflecting market apprehension. The reason Naver spent 1.6 trillion KRW to acquire Poshmark was that it had confirmed potential through the growth of previously invested C2C platforms.
Naver began investing seriously in the C2C market in 2020. Currently, Naver operates the domestic luxury limited-edition trading platform "Kream" and the Japanese fashion platform "Vintage City." In Europe, it has secured footholds by investing in platforms such as "Wallapop" and "Vestiaire Collective."
Kream has become a revenue driver for Naver Commerce. Launched in March 2020, Kream grew to a quarterly transaction volume of 350 billion KRW last year. It is estimated that Kream achieved an annual transaction volume of 1 trillion KRW last year. The rapid growth was due to targeting the MZ generation (Millennials + Generation Z), who show high interest in luxury and limited-edition items.
Japan and Europe's C2C services are also growing rapidly. Vintage City recorded 1.15 million downloads in Japan as of November last year. Vintage City, launched in 2020, promotes itself as "Japan's first vintage fashion community." At launch, it operated with 41 vintage shops only in Tokyo. Currently, about 400 vintage shops in Osaka, Kyoto, and other areas are participating. Eighty percent of its members are in their teens to thirties, the age group leading trends and consumption.
Wallapop, in which Naver invested 155 billion KRW, is Spain's number one secondhand trading platform. It has over 15 million members and has shown rapid growth since COVID-19. In 2020, profits increased by more than 50% compared to the previous year. Wallapop ranks first in sales in the shopping category on the Spanish Apple App Store and expanded its service to Portugal this year.
Naver CEO Choi Soo-yeon is answering employees' questions on the 9th (local time) at the Poshmark office located in Redwood City, San Francisco, USA. (Photo by Naver)
Securing a Community of Over 100 Million Worldwide
All C2C platforms operated or invested in by Naver have communities. Poshmark is a C2C commerce platform that emphasizes local social and community functions. By integrating Naver’s strong community capabilities, the market can be expanded into the digital advertising sector.
Poshmark, whose acquisition was recently completed, has 80 million members worldwide. When combining the members of domestic Kream and the Japanese and European C2C platforms, the total easily exceeds 100 million. Naver’s core business, the advertising sector, is experiencing a decline due to the global economic slowdown. However, introducing advertising solutions to a C2C community exceeding 100 million members is expected to create significant synergy.
In fact, on the 9th (local time), Naver CEO Suyeon Choi met with employees at Poshmark’s office in Redwood City, San Francisco, USA, and demonstrated Posh Lens, which applies Naver’s Smart Lens technology. Regarding synergy from the acquisition, CEO Choi explained, "Poshmark has a unique business model combining commerce and community, showing high growth potential in the C2C commerce market. Its main user base is the MZ generation, which is flexible in trying new services."
She added, "We will maximize the shopping experience within Poshmark and diversify the business model by introducing Naver’s live commerce, AI technologies, and advertising solutions."
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