Naver Starts Same-Day Delivery and Free Returns for Some Products
Wow Membership Monthly Fee Increased, Benefits Strengthened Consecutively
Coupang "Preventing Loyal Customer Loss"... Points Accumulation Reduced
Naver announced on the 18th that it will start same-day delivery and Sunday delivery for its 'Naver Arrival Guarantee' products. This is interpreted as a strategy to absorb members who left Coupang after a significant increase in membership fees. On the same day, Coupang announced that it will strengthen the benefits of the ‘Wow Card,’ including a 4% cashback on payment amounts. Amid the intensified invasion of Chinese e-commerce platforms like AliExpress and Temu, a full-scale battle seems to have begun between the two domestic e-commerce giants.
Coupang Wow Membership Defectors ‘Picked Up’ by Naver
Naver guarantees same-day arrival if buyers order Naver Arrival Guarantee products by 11 a.m. Products ordered on Saturday can be received on Sunday. If the product is not received on time, the buyer will receive 1,000 Naver Pay points. Naver plans to strengthen its logistics competitiveness through fast delivery to secure its position in the commerce market.
Naver will start same-day delivery focusing on daily necessities with high demand for fast delivery, beginning in Seoul and the metropolitan area. Products eligible for same-day delivery account for 50% of the ‘Arrival Guarantee’ products. The Arrival Guarantee solution, introduced by Naver in 2022, is a service that allows buyers to check the expected arrival date immediately after payment, based on secured logistics data.
Same-day delivery will start with general consumer goods and fashion categories. Large items like toilet paper, quickly depleted items such as diapers and baby formula, and seasonings and sauces needed for dinner can be ordered early in the morning or during the commute (by 11 a.m.) and still be delivered the same day. Buyers who do not receive same-day delivery products on time will be compensated with 1,000 Naver Pay points. Sunday delivery, which allows products ordered on Saturday to be received on Sunday, will also start mainly in Seoul and the metropolitan area. This means delivery will be available throughout the week, including weekends and holidays.
Additionally, starting from the 22nd, Naver will support the usage fees for ‘Return Care,’ an insurance service that compensates free exchange and return shipping costs for Arrival Guarantee sellers. This is expected to enable Arrival Guarantee buyers to enjoy more convenient free return and exchange services. Usually, shipping costs for returns and exchanges are often borne by sellers, which can affect profitability and business viability. By supporting the usage fees for Return Care on Arrival Guarantee products, sellers can provide free exchange and return services to buyers without bearing the cost burden.
Coupang Extends Wow Card Cashback Benefits
In response, Coupang announced on the same day that it will extend the benefits of the Wow Card, which allows subscribers to earn up to 4% cashback on payments made at Coupang, Coupang Eats, and Coupang Play Store, until October next year. Additionally, four types of Lotte Cinema discount coupons will be provided monthly.
The Coupang Wow Card is a partnership card available only to Wow Membership subscribers. It was launched in October last year in collaboration with KB Kookmin Card to enhance membership benefits. The Wow Card offers up to 4% cashback (2% basic + 2% additional promotion) in Coupang Cash on payments made at Coupang, Coupang Eats, and Coupang Play Store, up to 52,000 KRW per month, without any minimum spending requirement. For other affiliated merchants, up to 1.2% cashback (0.2% basic + 1% additional promotion) is earned in Coupang Cash. Originally, Coupang planned to offer these cashback benefits until October this year but has extended them for another year.
Coupang is also running a ‘Family Month Food Promotion’ event until the 7th of next month, offering Wow members up to 78% discounts on about 200 products weekly. During the same period, about 130 travel-related products, including luxury hotels, resorts, and theme parks, are offered to Wow members at discounts of up to 52%.
Earlier, Coupang raised the monthly fee for new Wow Membership subscriptions from 4,990 KRW to 7,890 KRW starting on the 13th. Existing members’ fees will also increase to the same price from August, raising concerns about losing loyal customers. Because of this, there is analysis that Naver is trying to absorb members leaving Coupang by offering delivery services that compete with Coupang’s biggest strengths, such as ‘early morning delivery’ and ‘free returns.’
Previously, Gmarket, a subsidiary of the Shinsegae Group, announced that it will lower the annual fee for new subscribers to its integrated group membership, Shinsegae Universe Club, from 30,000 KRW to 4,900 KRW starting next month. Also, Kurly, which first started early morning delivery, began offering a 3-month free trial for all new subscribers to its paid membership, ‘Kurly Members.’
As Chinese e-commerce companies such as AliExpress, Temu, and Shein continue to increase their market share in the domestic e-commerce market, domestic e-commerce platforms are responding with strategies to secure loyal customers by offering significantly enhanced membership benefits. This fierce competition in the domestic e-commerce industry to absorb members who left Coupang following the Wow Membership price increase is also seen as a background for strengthening membership benefits.
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