Naver Bets Shopping Business Will Offset Search Decline
Naver is pouring resources into online shopping as generative AI threatens its core search business. The South Korean company's first-quarter earnings are expected to reach record levels, driven largely by growth in shopping rather than advertising or search services.
The shift reflects a strategic calculation: search revenue faces pressure from AI chatbots, so Naver is building shopping into a profit engine. If a planned merger with cryptocurrency exchange Dunamu closes, shopping and fintech will become the company's primary focus.
Nepleus Gains Ground on Coupang
Naver's shopping app Nepleus reached 7.77 million monthly active users in March, up 9% from February. The app ranks third in South Korea behind Coupang (35.03 million) and 11st (8.15 million).
Customer satisfaction tells a different story. Nepleus users reported 84% satisfaction compared to Coupang's 72%, according to research firm Open Survey. A year ago, Coupang led 83% to 79.7%.
Nepleus launched a shopping AI agent in February that recommends products based on user behavior and preferences. Naver plans to add real-time trend analysis and automatic product suggestions. Starting in June, the company will remove underperforming items from Smart Stores-where third-party sellers list products-to reduce duplicate listings and improve search quality.
New Platforms Target Specific Audiences
Naver recently launched Knockit, a fashion platform aimed at users in their 20s and 30s. The app recommends outfits for specific situations like "a good day for running" or casual outings near home. Knockit will integrate with Naver's shopping AI agent to provide personalized recommendations.
Cream, Naver's trading platform for limited-edition goods, generated 2.025 billion Korean won in sales last year, up 14% year-over-year. Operating losses fell 8.8% to 81 billion Korean won. Sneakers once dominated the platform but now represent only 37% of transactions, with smartphones and luxury goods growing.
Shopping Drives Profit Forecast
Naver projects first-quarter revenue of 3.151 trillion Korean won with operating profit of 564.7 billion Korean won. That represents 13% revenue growth and 12% profit growth year-over-year.
Industry analysts attribute the forecast to shopping business improvements. Free shipping, return benefits, and AI-driven personalization are expected to attract more users and increase transaction volume.
For sales professionals, Naver's strategy offers a case study in how companies reposition around customer data and AI. The company is using purchase history and behavior patterns to drive recommendations rather than relying on search advertising-a model worth monitoring as other platforms follow similar paths.
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