Building a Secondhand Trade Belt Connecting Asia, North America, and Europe
Targeting the 1020 Generation Beyond the Search-Centered 3050 Generation
Naver has established a triangular alliance connecting Asia, Europe, and North America by acquiring Japan's largest secondhand trading platform. The strategy aims to attract the younger generation by linking secondhand trading platforms in various countries that have emerged as playgrounds for the MZ generation (Millennials + Generation Z).
Naver Cream Acquires Japanese Secondhand Trading Platform
Naver's peer-to-peer (C2C) platform subsidiary Cream announced on the 4th that it will invest 97.6 billion KRW in Soda, Japan. Through this, it will secure a 43.6% stake. Soda is expected to be incorporated as a consolidated subsidiary of Cream. Soda operates 'Sneakerdunk,' Japan's largest limited-edition trading platform. Since launching the Sneakerdunk service in 2018, it has received investment from SoftBank's venture capital fund 'Vision Fund 2.' Based on this investment, Soda acquired its competitor Monokabu in 2021, establishing itself as Japan's number one limited-edition trading platform.
This investment will enable Cream and Soda to actively realize business synergies. Korean and Japanese brands listed on Cream and Soda can expand their customer base through each other's platforms. The two companies plan to provide advanced services by combining their inspection expertise. They also aim to expand their business by leveraging overseas bases held by each platform. Cream has invested in Southeast Asian C2C platforms in Thailand, Malaysia, and Indonesia. On this day, Cream increased its stake to 34.4% by investing 600 million KRW in Sasom Company, which operates the limited-edition trading platform Sasom in Thailand. Soda is also preparing to expand its services to Singapore, Australia, and the United States. The goal is to connect the commerce markets of the two platforms and leap forward as Asia's largest C2C platform.
With this, Naver has completed a C2C trading belt spanning Asia, North America, and Europe. Earlier this year, Naver invested about 100 billion KRW in the Spanish secondhand trading platform Wallapop. Wallapop holds a 70% market share in Spain's secondhand trading market and is considered the European version of 'Danggeun Market.' With this investment earlier this year, Naver secured a 30.5% stake, becoming the largest single investor. Beyond securing management rights with North American secondhand trading platform Poshmark, Naver is generating business synergies. The acquisition was completed earlier this year, and since July, Naver's AI image search technology has been applied. Using Naver's 'Smart Lens' technology, 'Posh Lens' was introduced, which finds the most similar product with just one photo.
Capturing the MZ Generation with Community-Based Commerce
Naver is building a global C2C belt to target the MZ generation. Naver's existing users, who have grown around its search services, are mainly in their 30s to 50s. To sustain growth, it needs to target the 10s and 20s age groups. The secondhand trading market is vibrant with young generation communities and lacks absolute giants like Amazon or Google. In fact, the main users of the platforms Naver has invested in are young generations. Among Poshmark's 80 million users, 80% are from the MZ generation. Wallapop's 15 million users are mainly in their teens and twenties.
The MZ generation is sensitive to trends but values experiences over ownership. Therefore, they have no hesitation in selling what they own to buy products they do not have. They are also accustomed to communicating with individuals who share the same interests within specific categories such as limited editions and luxury goods on social networking services (SNS). Poshmark is also a community-based commerce service similar to Instagram. Users discover products while staying within the community, leading to purchases. Given the active community nature of secondhand trading, Naver's strengths in community and portal services can create synergies with other businesses. This is why Naver has chosen 'community-based commerce' as its future growth engine.
The market outlook is also bright. Boston Consulting Group estimated that the global secondhand trading market, which was $40 billion (about 54 trillion KRW) in 2021, will reach $77 billion (about 105 trillion KRW) by 2025. It is expected to record an annual growth rate of 15-20% over the next five years. An industry insider explained, "The MZ generation enjoys the experience of discovering desired items on SNS, acquiring them, and then reselling them as if it were a game. If luxury and designer brands in their wardrobes enter the secondhand trading market, a high-value e-commerce market will be formed."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
